Norbert Dentressangle is to be acquired by US 3PL XPO Logistics for €3.24bn (£2.3bn) – in a deal that values ND at €2.17bn and incorporates €1.08bn of net debt – creating what both parties claim to be one of the top 10 logistics firms in the world.
The deal will also mark the end of one of the most prominent family names in European logistics with XPO intending to rebrand the acquired operations under a single global name: XPO Logistics.
The combined company will have 52,350 employees at 863 locations in 27 countries. XPO said it does not intend to reduce the total number of full-time employees in France for a period of at least 18 months from closing the deal, but made no mention of ND's activities in the UK – which account for approximately 29% of annual turnover.
XPO intends to maintain the European headquarters of ND in Lyon, and also intends to maintain the headquarters and centre of decision of Norbert Dentressangle’s European logistics business in France, as well as its transportation business in Drôme in south-eastern France.
Connecticut-based XPO has entered a binding agreement to purchase a 67% shareholding in ND from Norbert Dentressangle himself, and his family. It is a move that will trigger antitrust clearance investigations that, if successful, will see XPO purchase the remainder of the shares.
ND has significantly larger turnover than XPO (€ 4.7bn, or £3.44bn, as of 31 December 2014, compared with XPO’s $2.4bn, or £1.5bn in the same period), but the US firm does have $1bn of cash and a financing commitment of $2.6bn from Morgan Stanley in order to facilitate the deal.
XPO said a strong dollar to Euro exchange rate was a “favourable dynamic” behind the deal.
The US firm is an acquisitive business in its domestic logistics market, adding 13 separate businesses to its portfolio since a 2012 equity investment led by Jacobs Private Equity – but this is its first expansion outside of the North American market.
ND acquired US contract logistics and haulage business Jacobson, the fourth largest operator in the US market, in July 2014.
Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said: “This is a defining moment in the growth of XPO. Our planned acquisition of ND will catapult XPO to a top 10 global logistics company. It will more than triple our EBITDA to $545m and increase our revenue to about $8.5 bn upon completion of the tender offer, nearly achieving our 2017 financial targets two years ahead of plan. The acquisition of ND is a major leap forward, but we’re still in the early innings of our long-term growth plan.”
ND chief executive Hervé Montjotin will remain as chief executive officer of XPO’s European business and president of the parent company.
Montjotin said: “By joining XPO, we will become part of an organization that shares the ambition that has guided us since the creation of Norbert Dentressangle 36 years ago: to become a global partner able to effectively support our customers in the management of their supply chains.
He added: “As XPO’s platform for growth in Europe, we can continue to pursue this goal on an even larger scale, to the benefit of our customers and employees. I am proud to lead this growth for XPO, together with the current management board.”
Explaining the rationale behind the deal, XPO said that ND’s services strongly mirrored its portfolio: including e-fulfillment; freight brokerage; an asset-light palletized network; freight management; dedicated and owned truckload; and global freight forwarding. XPO said it intends to use the acquired operations as a platform to grow its business in Europe.
ND is the fourth largest operator in the UK, excluding freight forwarding revenue, according to the Motor Transport Top 100.
M&A actvitity is predicted to increase in the logistics sector throughout 2015, according to leading industry analysts.
