Subscribe to our free, weekly email newsletter!


Transportation and logistics M&A activity in second quarter up slightly, says PwC

By Jeff Berman, Group News Editor
August 02, 2013

Merger and acquisition (M&A) activity in the transportation and logistics sectors in the second quarter was up slightly on an annual basis, according to data released this week by Pricewaterhouse Coopers.

Deals cited by PwC 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all announced deals for the quarter-as opposed to completed deals only-and the report does not parse out deals that are withdrawn, intended, or pending.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 $15.2 billion and represents 31 announced deals compared to the second quarter of 2012, which had 51 deals totaling $14.3 billion. And the average deal size for the quarter at $490 million topped last year’s $281 million. PwC attributed the annual gain to three “infrastructure mega deals” worth more than $1 billion.

In the report, PwC noted that infrastructure-related deals should lead the way for M&A transactions in the transportation and logistics sector, especially in South America and Europe.

“What we are seeing is not a bad environment for deal making but not a great environment for it either,” said Jonathan Kletzel, U.S. transportation and logistics advisory leader for PwC, in an interview. “There are some signs of improvement from a global economy and geopolitical perspective over the last decade but things are largely flat.”

The report observed that in the second quarter strategic investors accounted for 61 percent of deals, while financial investors are showing an increased appetite for shipping and port-related deals that could likely be due to prolonged overcapacity in the ocean shipping sector.

Kletzel said there is a feeling among investors that as various modes have recovered, ocean shipping could be next, leading to more opportunities for better margins in that sector.

Deal making activity in the United States and Europe is somewhat tempered compared to other parts of the world, according to PwC. The firm explained that the slower pace of deal making activity in these region is due in large part—especially in Europe—to companies largely remaining idle, or on the sidelines. What’s more, it pointed out that the respective economic challenges in each region are impacting activity, too, but that the near-term outlook for the U.S. is likely brighter due to the emergence of shale gas-related activity and the recent upswing in manufacturing activity, too.

“Those two trends are going to have a significant impact on the transportation industry over the next five-to-ten years in the U.S., especially in the upper-midwest area of the country,” he said.

As for the remainder of 2013, PwC expects infrastructure-related deals to lead deal-making activity, although certain regions could be sources of what PwC called headlining deals, but cautioned that economic activity is likely to remain muted due to economic concerns acquisition acquirers may have.

The breakdown by mode for deals valued at $50 million or more in the second quarter was as follows: 32 percent shipping, 32 percent passenger ground, 13 percent logistics, 3 percent trucking, and 10 percent rail.

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

As expected, global trade dipped from August to September but still saw annual gains, according to data issued this week by Panjiva, an online search engine with detailed information on global suppliers and manufacturers.

Transportation and logistics merger and acquisition (M&A) activity in the third quarter saw annual gains, which were driven by smaller deals in the trucking logistics, shipping, and passenger air sectors, according to data issued in the Intersections report by PwC this week.

With the holidays rapidly approaching, it appears retailers are not quite done getting inventory set up and on the shelves in time for what is expected to be a fairly active shopping season. That much was evident based on recent data for September volumes issued by the Port of Los Angeles (POLA) and the Port of Long Beach (POLB).

Join Industry Expert Adrian Gonzalez for this educational webinar on the tenets and the benefits of Closed-Loop Operational Management. You’ll learn how Closed-Loop Operational Management optimizes orders, inventory, and transportation concurrently, and how it is able to optimize large-scale problems on a daily basis.

In a separate conference call following CP’s third quarter earnings release call yesterday, CP CEO Hunter Harrison make myriad convincing points for a merger between CP and CSX and offered up his take in general industry M&A as well.

Article Topics

News · PwC · 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