C.H. Robinson expands Global Forwarding division with acquisition of Milgram & Company Ltd.

Late last week, global logistics services provider and freight forwarder C.H. Robinson announced it acquired Montreal, Quebec-based Milgram & Company Ltd., a provider of freight forwarding, customs brokerage, warehousing, and surface transportation services.

The sale price, according to C.H. Robinson, was roughly $62 million (CAD and $50 million USD), and it is expected to be approximately neutral to earnings in 2017 and slightly accretive in 2018 and will be financed through cash and funds drawn from the company’s existing revolving credit facility.

Milgram has 3,500 customers and around 300 employees, with six Canada-based offices and one in the United States and is a gold standard winner of Canada’s Best Managed Companies.  For the fiscal year ending May 31, 2017, Milgram had approximately $155.3 million CAD (approximately $124 million USD) in gross revenues.

C.H. Robinson President, Global Forwarding, Mike Short told LM there were multiple drivers for this acquisition.

“We are investing in a global growth strategy that continues to bring new opportunities and best-in-class services to our customers and our business,” he said.

“Acquiring Milgram & Company Ltd. enables us to serve our customers who are looking to move products into and out of Canada and have confidence in the customs process. We also look forward to offering additional services and our global network to existing Milgram & Company Ltd. customers.

As for the benefits that Milgram will provide to existing C.H. Robinson customers, Short explained how Milgram & Company Ltd. is a leader in customs brokerage and freight forwarding in Canada, adding that Robinson anticipates that some of their customers will be interested in services that C.H. Robinson offers globally.

“As we integrate Milgram & Company Ltd. into C.H. Robinson, we will continue to serve our customers and bring them logistics solutions that help their supply chains work smarter, not harder,” he said.

When asked what Milgram brings to the table for Robinson in terms of offering things that Robinson did not previously have along the lines of service offering or geographic coverage, Short said Milgram brings a level of expertise to its Canadian offerings that will best serve Robinson customers shipping into and out of Canada.

And he also said that Milgram brings scale and a robust LCL (less-than-container load) consolidation product to Canada. With six Canadian offices and one in the United States, Milgram is uniquely positioned to provide supply chain expertise and execution to Robinson’s collective customers, as well as help them refine processes and become an integral part of our customers’ businesses, he noted.

Milgram will be integrated into C.H. Robinson’s Global Forwarding division and single global technology platform, called Navisphere.  This division serves shippers on five continents and is comprised of more than 4,000 employees and 125 global offices, with its customers able to leverage what Robinson called “considerable” freight volume to access capacity at competitive rates.

Bringing Milgram into the fold represents the third acquisition for the Robinson’s Global Forwarding division over the last five years.  

In September 2012, it acquired Phoenix International, an international freight forwarding service with roughly 2,000 employees located in 15 countries across the globe. Since then, C.H. Robinson’s Global Forwarding division has seen rapid growth, explained Short. And a year ago, Robinson acquired APC Logistics, a leading provider of freight forwarding and customs brokerage services in Australia and New Zealand. This deal allowed the company to further expand its global reach into the Oceania region, adding approximately 300 employees and seven offices to C.H. Robinson’s Global Forwarding business.

Robert W. Baird & Co. analyst Ben Hartford wrote in a research note that “the deal appears to be a logical continuation of CHRW’s strategy to expand its freight forwarding footprint), with CHRW's previous Canadian operations mostly reflecting a small, largely organically grown customs brokerage offering. Additionally, we expect the IT integration to be seamless (with Milgram rolling onto CHRW's Navisphere platform).”