FedEx completes acquisition of Rapidao Cometa

FedEx said its FedEx Express subsidiary has completed the acquisition of Rapidão Cometa Logistica e Transportes S.A., a Brazil-based transportation and logistics services provider. The acquisition was initially announced in late May.

Financial terms of the deal were not disclosed.

Company officials said that this deal represents the latest step in its strategy for profitable growth in Latin America, as well as enhance FedEx Express’ international and Brazil business offerings.

FedEx and Rapidão’s relationship goes back to 2001, during which time Rapidão has served one of FedEx’ authorized representatives in Brazil. FedEx noted that Rapidão will supplement FedEx Express’s Brazil-based service portfolio, with the company committed to growing in Latin America through key strategic investments.

“FedEx will now be able to provide a more comprehensive portfolio of services in Brazil, including international air express, domestic ground and value-added services such as supply chain and logistics solutions,” said Juan N. Cento, president, FedEx Express, Latin America and Caribbean, in a previous e-mail.

FedEx said that Rapidão will increase its Brazil-based footprint and bring various offerings to the company, including:
-45 operational branches and approximately 145 distribution points;
-approximately 770 vehicles and trailers;
-logistics and distribution, which consists of a wide range of products and services;
-a ground distribution network that provides day-definite transportation for small packages and heavyweight shipments; and
-approximately 9,000 employees across Brazil.

FedEx said that the integration of the logistics, distribution and express businesses of Rapidão Cometa will be achieved in phases over a period of 18 to 24 months after closing “and will result in an extensive and competitive FedEx network and portfolio throughout Brazil.”

Robert W. Baird & Co. analyst Ben Hartford wrote in a research note that this deal
complements and expands Express’ footprint in emerging Latin America region, which he wrote is an important growth market for integrators like FedEx.

“Given FDX and Rapidão’s prior partnership, acquisition is a natural evolution in the partnership and consistent with FDX’s recent strategy of pursuing smaller tuck-in acquisition that support organic growth within FDX’s existing network,” noted Hartford.

FedEx also announced it has completed the acquisition of TATEX, a France-based B2B express transportation company focused on heavy shipments. This acquisition was originally announced in April.

TATEX was established in 1976 and has more than 1,000 employees and a nationwide network which includes a central Hub near Paris and 35 stations including 6 regional hubs. It also added that TATEX carries more than 19 million parcels each year, representing an annual revenue of about 150 million Euros (nearly $200 million U.S.).

And it provides a wide range of express and time-definite services for parcels and pallets of up to 800 kg in France and throughout the world. The majority of TATEX’s customers are in the high tech, spare parts, automotive and clothing industries. 

These deals follow FedEx’ early April acquisition of Poland-based courier company Opek Sp.Z o.o. Financial terms of that deal were not disclosed. Company officials said that the Opek acquisition, which is expected to close this summer, is part of its growth strategy in Europe and is expected to supplement FedEx’ service portfolio in Poland.

Both of these deals come fairly soon after FedEx’ biggest competitor, UPS, announced in March it will acquire TNT Express for roughly $6.77 billion ($5.16 billion euro).

FedEx CEO Fred Smith said on the company’s March 22 fiscal third quarter earnings call that FedEx has a profitable multi-billion dollar business in Europe that is growing strongly.

“I am extremely pleased with our operations there and very confident in our plans to continue expansion, primarily through organic growth,” he said. “We believe these plans will continue to improve our competitiveness in Europe and further continue to contribute to profitable international growth.”