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Share Name | Share Symbol | Market | Type |
---|---|---|---|
FedEx Corp | NYSE:FDX | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 260.73 | 41 | 12:18:01 |
By Robbie Whelan
XPO Logistics Inc.'s agreement to buy French freight forwarder Norbert Dentressangle SA for $3.53 billion caps a recent run of large deals in the logistics space. Whether it will result in a significant industry consolidation wave is another question.
The deal was Greenwich, Conn.-based XPO's second major acquisition since September, when it took in contract logistics provider New Breed Holding Co. for $615 million. FedEx Corp. has announced a combined $6.2 billion in deals since January, including plans to buy Pittsburgh-based third-party logistics provider GENCO and Dutch package-delivery company TNT Express NV.
Despite the big-ticket deals, M&A in the arena has actually fallen off dramatically over the past two years--and 2015 deal volume is on pace to decline further. According to Dealogic, there were 248 M&A deals in the transportation sector in 2013, with a combined value of $29.9 billion. That compares with 195 deals worth $13.8 billion in 2014.
This year through the end of April, only 62 deals have been announced, with a combined value of $4.2 billion, putting 2015 on track for a year-over-year decline.
Much of the 2014 deal-making was concentrated in the maritime shipping industry, which has been plagued by overcapacity, and trucking , which is highly fragmented and dominated by small fleets, according to a recent PricewaterhouseCoopers analysis. The report attributed the general slowdown to a decelerating China economy and a strong U.S. dollar inhibiting Asian buyers of American firms, among other things.
Recently, it's mainly smaller companies with fewer assets that are up for sale--and being snapped up in a flurry of deals with values between $5 million and $200 million over the past two years.
This could explain the lackluster deal values, says Daniel Herron, who runs a boutique investment bank specializing in logistics company transactions, Herron & Associates LLC.
In January, the Journal reported that E2open Inc., which makes supply-chain management software and had a market capitalization of roughly $165 million, had hired bankers to explore a sale.
"There's some smart money that's gotten into the transportation and logistics space, especially with asset-light companies," Mr. Herron said. "There's a big need for effective software and technology in the space, to allow smaller companies to compete with the larger ones."
Write to Robbie Whelan at robbie.whelan@wsj.com
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