M&A deals in the transport & logistics industry

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M&A deals in the transport & logistics industry

Key take-aways based on M&A data probed

We have analysed whether the transport & logistics (“Logistics”) M&A market has been going strong and have derived specific characteristics based on the M&A data probed.

M&A market maintains positive momentum

The overall M&A market has been going strong, driven by a number of trends. The cost of capital is low, levels of consumer and industrial confidence are high and private equity firms have a massive amount of unallocated capital available. Besides, by and large most companies report soaring revenues and profits and have ample resources to invest. We have analysed whether this positive M&A momentum applies to the transport & logistics (“Logistics”) industry as well and analysed whether we could identify specific characteristics based on the M&A data probed.

Key take-away 1: Upward trend in number of M&A deals in the Logistics industry

We have created a database containing all M&A deals in the Logistics industry with a European target that took place between 2012 and 2017. This allowed us to analyse the M&A activity in this market segment. Between 2012 and 2017, 641 deals were closed in the Logistics market. The number of deals per annum can be seen to have to slightly increased over the last couple of years. While in 2014 only 86 deals occurred, this number rose to 134 in 2016. Last year the deals in the Logistics industry slightly declined to 117.
Source: Mergermarket, Deloitte analysis

Key take-away 2: Growing number of private equity funded Logistics transactions

Apart from the number of deals, their characteristics are interesting, too. One of the results of our research shows a sharp rise in the number of private equity (PE) firms acting as acquiring party in these M&A deals; where 9% of all deals involved a PE buyer in 2012, this increased to 15% in 2017. The peak in the number of PE deals was in 2016, with 25 PE buyers (almost three times the number of 2012) and almost one out of five transactions involving PE.

Source: Mergermarket, Deloitte analysis


Key take-away 3: over 40% of the buyers come from abroad

Our research also reveals a lot of cross-border M&A deals in the Logistics industry. Out of all 641 deals occurring in the last 5 years, 42% had a buyer from a different country than where the target firm originated from (10% of the buyers were non-European). This represents a total of 267 cross-border deals. This percentage has been steadily increasing from 2013 onwards, with a peak in 2017, but not across all target countries. For instance, in France only 18% of the deals are cross-border deals. In the Netherlands, 58% of the deals had a buyer from a foreign country.

Source: Mergermarket, Deloitte analysis

Conclusion

As the rising trend in the number of transactions shows, the Logistics industry, too, benefits from the current positive M&A momentum.

Not surprisingly, as besides the positive macro-economic factors, the Logistics industry is being impacted by disruptive technologies, where new savvy players are entering the market, larger mid-market / corporate companies are forced to divest non-core or non-performing assets and acquire digital and technology capabilities and where smaller companies want to accelerate growth and/or defend their competitive position.

Moreover, we see an increased PE interest in the Logistics industry as the industry has been in a phase of transition from ‘pure asset based players’ towards 3PL/4PL ‘asset light’ logistics players that claim a larger share in the whole supply chain and in which software is a key-aspect of their business model. As PEs typically have a shorter investment horizon than strategic parties it will likely have a positive impetus on the number of transactions as well.
To end, although domestic transactions continue to dominate M&A in the Logistics industry, cross border transactions represent a significant share, with 4 out of 10 transactions having a foreign buyer. Due to the ongoing internationalisation of logistics networks and business activities we expect this increase to continue.
 

More information?

Deloitte advises mid-market and corporate buyers and private equity investors throughout the entire M&A deal life cycle. Our end-to-end merger, acquisition and divestiture advisory services are customized to meet the unique needs of each of our clients.

Do you consider a transaction, now or in the future? We will be more than pleased to discuss market trends with you and their implications for you.

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