Mergers and acquisitions are making a comeback bongdaso ìno the logistics sector as the roller coaster earnings that defined the pandemic era come to an end.
More companies are scouting purchases or considering a sale, according to finance and logistics executives, signaling the end of a two-year period bongdaso ìno which the once-bustling corner of the M&A industry slowed. Bankers, private-equity firms and consultants say a return to stability bongdaso ìno transportation and logistics markets is key to the renewed activity.
The Covid-19 pandemic was a boon to freight companies but a barrier for logistics-sector sales. The health crisis drove huge cargo volumes that fed into bumper earnings, which bongdaso ìno turn acted as a brake on M&A activity as buyers and sellers struggled to agree on prices based on lofty valuations.
Industry specialists say the past year of relatively weak but steady freight demand is providing the benchmarks buyers and sellers need to reach a consensus on valuations.
Evan Armstrong, chief executive of research group Armstrong & Associates, said stable earnings are helping with sales this year, such as Danish forwarder DSV’s acquisition of Deutsche Bahn’s logistics arm, DB Schenker, for more than billion, the biggest logistics deal bongdaso ìno recent years.
“A lot of the valuations were rationalized bongdaso ìno the last year, which helped get this deal done,” Armstrong said.
There have been several large logistics deals bongdaso ìno the U.S. over the past year. United Parcel Service recently sold its freight-brokerage unit, Coyote Logistics, to rival middleman RXO for just over billion. Trucking company Forward Air is exploring a sale amid activist pressure following a contentious recent takeover of Omni Logistics.
Greenwich, Conn.-based contract bongdaso ìno provider GXO, which had revenue last year of .8 billion, recently received an unsolicited bid and is now weighing “high-quality inbound offers,” according to a person familiar with the process.
Logistics specialists say activity has slowed sharply on the hundreds of smaller deals that usually flow through the sector. There were just 872 mergers and acquisitions bongdaso ìno the global transportation and logistics market last year, according to consulting firm KPMG, down 21% from 2021. The value of last year’s deals totaled just under billion, a decline of 76%.
Now, that landscape is changing. Armstrong said his firm tracked 12 deals of more than 0 million bongdaso ìno the first six months of this year, up from nine such deals bongdaso ìno all of 2023. He said his firm, which advises on potential mergers and acquisitions, is seeing much more interest from companies of all sizes looking to sell.
Industry specialists say the recent pullback bongdaso ìno interest rates is also helping spur activity.
They say some of the greatest potential M&A activity is bongdaso ìno companies owned by private-equity firms, which usually buy and hold companies for about five years. Some of those firms have had to wait to sell companies because of the pandemic-driven volatility bongdaso ìno the freight market.
“The floodgates are opening, especially on the private equity side from people that want to exit and haven’t been able to,” said John Anderson, an operating partner at private-equity firm Greenbriar Equity Group.
Private-equity firm H.I.G. Capital earlier this year sold Cardinal bongdaso ìno, a U.S. supply chain services provider, to Ryder System for an undisclosed sum, about five years after acquiring the company.
Dan Howard, a managing director and head of North America transport at Goldman Sachs, said the strong growth bongdaso ìno freight demand early bongdaso ìno the pandemic triggered a seller’s market bongdaso ìno which private-equity firms used low borrowing costs to outbid strategic investors. Today, he said, with interest rates still elevated, most of the activity is being driven by strategic investors.
“It’s all buyer driven,” Howard said. “Unsolicited knocks on doors and bilateral conversations.”
Source: https://www.msn.com/en-us/money/companies/stability-bongdaso ìno-freight-markets-is-reviving-logistics-dealmaking/ar-AA1sFvwM
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