Subscribe to our free, weekly email newsletter!


Transportation and logistics M&A activity holds steady, says PwC report

By Jeff Berman, Group News Editor
August 23, 2012

Transportation and logistics merger & acquisition deal activity in the second quarter continued the solid momentum seen in the first quarter and also was in line with deal making activity from the same quarter last year, according to PricewaterhouseCoopers (PwC) quarterly report, entitled “Intersections: Second Quarter 2012 global transportation and logistics industry mergers and acquisitions analysis.”

Deals cited by PwC in the Intersections report represent all announced deals for the quarter-as opposed to completed deals only-and the report does not parse out deals that are withdrawn, intended, or pending.

Second quarter deal value—for deals valued at $50 million or more—was $12.6 billion and represents 45 announced deals with an average deal value of $300 million, matching up closely with the second quarter of 2011 at 46 announced deals, a total deal value of $13.4 billion and an average deal value of $300 million. The number of deals topped the first quarter’s 35 but average deal value was about double the second quarter at $24.7 million and average deal value for the first quarter was $700 million.

Of the 45 announced fourth quarter deals, 12 involved U.S.-based targets or acquirers.

The breakdown by mode for deals valued at $50 million or more in the first quarter was as follows: 2 percent, railroad; 13 percent, trucking; 16 percent, logistics; 22 percent, passenger ground; 29 percent, shipping; and 18 percent, passenger air.

The biggest deal of the second quarter, according to PwC, was a pending $1.3 billion acquisition of Edinburgh Airport in Scotland by Global Infrastructure Partners LLC, a joint venture between Credit Suisse and General Electric. And the second largest deal of the quarter was a $1.2 billion merger between the National Shipping Company of Saudi Arabia and Vela International Marine. 

“There was not anything too terribly surprising with what we saw in the second quarter,” said Jonathan Kletzel, U.S. transportation and logistics advisory leader for PwC, in an interview. “There is definitely still a slowdown in Europe, while things are relatively steady in the U.S. and there appears to be a pickup in investments in the emerging markets. These are things which were largely expected.”

Even with concerns regarding the durability of the economic expansion in the U.S., fiscal issues in Europe, and a deceleration in growth in some key emerging markets that are creating barriers, the report noted that there are myriad potential drivers for future M&A activity.

When asked about some of these specific drivers, Kletzel pointed to how many companies have kept capital on the sidelines during the recession, and M&A activity serves as a solid investment for growth and service expansion by acquiring companies that have maximized their growth potential or are experiencing financial difficulties.

On a geographical basis, South America had a strong second quarter with seven deals valued at $3.4 billion, and the 12 U.S.-based deals came in at $3.8 billion.

While the overall transportation and logistics M&A market is on an upward trajectory, Kletzel said it is at the same time by no means to setbacks like economic turmoil, political issues in the Middle East, and the European economy, among others.

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Total POLB volumes dropped 9.1 percent in August at 573,083 TEU, and POLA volumes in August were up 6.7 percent compared to August 2013 at 757,702 TEU.

Following a week in which the average price per gallon was flat, diesel prices resumed their decline, falling 1.3 cents to $3.801 per gallon, according to the Department of Energy’s Energy Information Administration.

Read how others are using Business Process Modeling to implement Microsoft Dynamics AX with reduced risk.

While diesel prices have largely been out of the spotlight in 2014, freight transportation and logistics stakeholders always need to keep a close eye on what prices are doing, as it has a significant impact on transportation budgets and forecasting.

Railroad service issues and rates, which many rail shippers deem as unreasonable, are front and center in a piece of legislation to be introduced soon by Senators Jay Rockefeller (D-WV) and John Thune (R-SD), chairman and ranking member of the Senate Committee on Commerce Science and Transportation.

Article Topics

News · PwC · Logistics · Merger and Acquisition · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA