Third-party logistics provider Radiant Logistics announced Monday the acquisition of global freight management platform Navegate for $35 million.
Headquartered near Minneapolis-St. Paul, Navegate provides digital logistics services internationally and domestically out of offices in Chicago and Shanghai. Its offerings include customs brokerage, freight forwarding and truck brokerage, as well as drayage and transload services. The company’s proprietary trade platform provides advanced purchase order and vendor management.
Navegate generated $88 million in revenue and $5.9 million in normalized earnings before interest, taxes, depreciation and amortization for the 12 months ended Sept. 30. By comparison, Radiant (NYSE: RLGT) recorded $54.1 million in adjusted EBITDA over the same period.
The full purchase price was executed at six times EBITDA but is subject to holdbacks and adjustments to working capital.
| Acquisition price | $35 million |
| Navegate revenue run rate | $88 million |
| Radiant revenue run rate | $900 million |
| EBITDA contribution | $5.9 million LTM |
| Combined EBITDA | $60 million LTM |
| Recent acquisitions by Radiant | Adcom Worldwide agent stations, Dedicated Logistics Technologies and Lomas Logistics |
Navegate will operate as a subsidiary of Radiant with current leadership remaining in place. The deal is expected to provide cross-sell opportunities as Radiant integrates the freight management platform across its more than 100 offices.
“These new global trade management capabilities will be made available to the entire Radiant network to provide our customers with purchase order and vendor management tools that unlock SKU-level visibility from the manufacturing floor in Asia through final delivery here in the U.S.,” said Bohn Crain, Radiant CEO and founder.
Radiant indicated on its quarterly call in November that the company would likely use positive cash flows and the balance sheet to repurchase shares given that its stock price “does not accurately reflect Radiant’s intrinsic value or long-term growth prospects.” At the time, Crain also said M&A may be on the back burner as valuation multiples were too high.
At a mid-single-digit EBITDA multiple, the acquisition of Navegate was achieved at a modest multiple compared to recent industry deals.
“We have been patiently looking for the right next transaction to complement the Radiant network and we found it in Navegate,” Crain stated. “With both the enhanced service offerings and proprietary global trade management technology, we believe we will further differentiate ourselves in the marketplace and be even better positioned to provide additional support for both current and prospective customers in this capacity-constrained market.”
The press release didn’t indicate how the transaction will be funded but Radiant had net debt leverage well below one-time trailing EBITDA at the end of September.
“We are looking forward to leveraging our own strengths along with the capabilities of the Radiant network to bring additional value to our customers, while introducing the Radiant network to our purchase order and vendor management capabilities,” stated Nathan Dey, CEO of Navegate.
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