DC Velocity - September 2015

close the purchase price. However, published reports have put the cost at about $800 million, which, if accurate, would peg the value of Brentwood, Tenn.-based OHL at about 10 times earnings before interest, taxes, depreciation, and amortization, or EBITDA, according to estimates from consultancy Armstrong and Associates Inc. Evan Armstrong, president of the firm, said the reported purchase price reflects reasonable value for a company like OHL. The transaction will be financed through a mix of cash and financing, Geodis said.

Based on gross revenue—revenue before factoring in the costs of purchased transportation—the combined company would become the world’s 11th largest third-party logistics service provider, according to Armstrong’s 2014 database. If the reported purchase price is accurate, it would mark the ninth acquisition this year of $100 million or more involving one or more 3PLs. That matches the record set in 2007, Armstrong said.

PLANS FOR REBRANDING

For now, OHL will keep its name. Eventually, it will be rebranded as Geodis, along with the other companies Geodis has acquired.

Geodis covers more than 120 countries worldwide through its network partners and subsidiaries, including Geodis Logistics, Geodis Wilson, and Geodis Supply Chain Optimization, the latter of which grew out of its December 2008 acquisition of IBM’s internal global logistics operations. European operations account for about 80 percent of the group’s revenue, with France accounting for about 60 percent, according to Armstrong data.

During 2008, Ozburn-Hessey Logistics and all of its acquired companies rebranded as OHL. The branding project was undertaken to meld the multiple divisions, companies, and brands that were parts of Ozburn-Hessey. Companies that had been acquired had specialized service offerings, management teams, and customer relationships and were well known within their geographies, according to Armstrong. However, none of the companies had an established international brand, he said.

The French logistics giant Geodis Group has acquired U.S. third-party logistics service provider (3PL) Ozburn-Hessey Logistics LLC (OHL) for a reported US$800 million, a deal that combines companies with nearly $9 billion in annual revenue, gives Geodis a strong presence in U.S. value-added distribution services, and opens up international markets to OHL.

Geodis, which operates in 16 U.S. markets under the name of Geodis Wilson USA, said the move would allow it to expand its U.S. footprint in contract logistics and freight forwarding, which represent two of its five operating divisions, and to tap more strongly into the U.S.

3PL market. With about US$7.5
billion ( 6. 8 billion euros) in annual
revenue, Geodis is one of Europe’s
top five logistics companies. It is
owned by SNCF, the French nation-
al railway system. As a result, OHL’s
rivals will now be in the unusu-
al position of competing against a
state-owned entity.

In business since 1951, OHL operates approximately 120 distribution centers in North America, controlling more than 36 million square feet of warehouse space. It provides a broad array of value-added services within its warehouse and DC network. The combined operation will have slightly less than 70 million square feet of global warehouse space that Geodis will no doubt move aggressively to sell across its platforms.

OHL is owned by New York-based private equity firm Welsh, Carson, Anderson, and Stowe, which has been shopping the company for some time. Geodis declined to dis-