TNT POST BUYS CSX LOGISTICS UNIT FOR $650 MILLION
TNT Post Group N.V., the large Dutch postal service and logistics group, is taking over U.S. logistics provider CTI Logistx from CSX Corp. for $650 million.
The takeover, still subject to regulatory approval, is the largest acquisition TPG has undertaken since its stock market listing in 1998. TPG and CSX Corp. expect to complete the transaction in late September.
CTI, based in Jacksonville, Fl., is a profitable subsidiary of CSX, which has seen results from its rail, port and shipping activities decline in the last two years.
CTI has annual revenues of about $460 million and earnings of $34 million.
TPG said that, as a result of this acquisition, it will “further
strengthen its leadership in automotive logistics” and become one of the three largest logistics companies worldwide.
Ad Scheepbouwer, chief executive officer of TPG, said that CTI’s third-party logistics activities, such as its warehousing-based value-added capabilities, will complement the group’s TNT Logistics operations.
“We have been searching for opportunities to strengthen our logistics operations in North America for some time,” Scheepbouwer said.
CTI provides transportation management, logistics consulting and process re-engineering services, with a presence in over 26 U.S. states, Canada, South America and Europe.
David Kulik, chairman and CEO of CTI and his management team will remain in charge of the company, TPG said. The company’s headquarters will stay in Jacksonville.
TPG employs more than 116,000 people in 64 countries and provides mail, express and logistics services under the brand names TNT and Royal PTT Post. It had annual sales of 8.5 billion euro ($7.6 billion) in 1999.
For the struggling CSX group, the sale of CTI represents another major divestment, following the $800-million sale last year of Sea-Land Services, Inc.’s international activities to the A.P. Moller/Maersk group.
“This transaction represents an excellent outcome for our shareholders, for TPG and the outstanding people of CTI,” said John W. Snow, CSX chairman and CEO. Snow indicated that proceeds from the sale would be used primarily to repay long-term debt.