Tuesday, October 18, 2005

Kuehne & Nagel Paying 590 Million Bagels, for an ACR Croissant!

Kuehne & Nagel International announced it is buying Paris-based ACR Logistics from Platinum Equity Group of Los Angeles in a deal worth $590 million and that will make it one of the top five contract logistics providers in the world.

The acquisition of ACR, formerly Hays Logistics, a UK-based company, is Kuehne & Nagel's largest acquisition and comes less than a month after Deutsche Post, the parent of DHL, paid $6.7 billion for Exel.

Platinum acquired Hays Logistics from the Hays business services group for $175 million in November, 2003. Kuehne & Nagel said it is paying $528 million in cash for ACR and also assuming debt of $60 million. It will finance the acquisition with existing cash and the sale of 1.7 million shares, equivalent to 7.1 percent of its share capital.

Kuehne & Nagel's acquisition will boost its contract logistics business in the UK and France retail and telecommunications sectors. This will also create growth from cross-selling activities, particularly in eastern Europe and Asia. At this point, nominal opportunity rests in the Americas.

ACR, which has close to 15,000 employees, generated revenues of $1.44 billion and made an operating profit of $72 million in 2004.

Once again, the deck is re-shuffling in response to the giant deals of DPost/Exel and Maersk/P&ONL. More to come...so if you have a bit of cash, try looking at the second tier 3pls and contract logistics providers as a good investment.


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