Apollo Management to buy TNT Logistics
Dutch mail and global logistics provider TNT N.V. said Wednesday it has agreed to sell its logistics division to New York-based investment firm Apollo Management L.P. for 1.48 billion euro ($1.9 billion) in cash.
TNT will receive a 5 percent stake in the new company in exchange for 15 million euros. TNT said it will return the majority of the proceeds to shareholders through a share repurchase program.
TNT put the contract logistics division on the auction block last December to concentrate on its high-margin express delivery services, mail and freight management.
The sale is subject to approval by TNT’s shareholders and competition authorities. TNT said it expects to complete the deal by the end of the year, at which time Dave Kulik will resign from the TNT board to become chief executive officer of the new company.
TNT appears to have received close to its asking price. Industry sources had speculated during the auction process that TNT would have to lower its price to about $1.5 billion because of the lack of committed bidders during the auction process. Logistics companies stayed away from the deal in the end, but competition among financial investors kept the price high.
According to news reports, Apollo beat out another private equity firm, PAI Partners of France, for TNT. Dow Jones Newswire reported that TNT was prepared last week to sell the logistics division to PAI for more than $1.4 billion until Apollo made its counter bid.
Apollo has invested more than $16 billion in a wide range of industries, including Pacer International (intermodal management) and Quality Distribution (bulk tank truck) in the transportation and logistics field.