The Danish firm’s acquisition of third-party logistics provider UTi is the latest in a string of international mergers in the 3PL industry this year.
Struggling third-party logistics provider UTi Worldwide has agreed to be sold to Danish supply chain specialist DSV for $1.35 billion, continuing a remarkable year of consolidation within the freight industry.
DSV will pay $7.10 in cash per share. The price represents a 34 percent premium above the 30-day average trading price for ordinary shares and a 50 percent premium to UTi’s closing price Oct. 8.
The news is not a complete surprise as the companies were believed to be in deep discussions about a DSV takeover at the end of last year.
“The potential combination of our two businesses has a strong cultural fit, aligned strategy, and a complementary client base and geographic footprint,” UTi Chief Executive Officer Ed Feitzinger, who took the top job after predecessor Eric Kirchner was ousted, said in a statement. “We have the opportunity to draw on the current strengths and scale of both companies to bring solutions to our clients that we could not have delivered on our own. We believe that the $7.10 cash price to holders of our ordinary shares provided by this strategic combination is the best available outcome for ordinary shareholders while allowing us to develop with DSV a nimble, efficient, and comprehensive service offering for our clients.”
The acquisition is expected to be completed in the first quarter of 2016, subject to approval of UTi shareholders and regulatory approvals.
DSV, which has 530 offices and 130 warehouses in 75 countries, said it has all necessary financing to consummate the deal. DSV, an $8.7 billion company, provides ocean and air freight forwarding, pan-European trucking and contract logistics.
UTi, ranked number 20 among NVOs by research firm Zepol Corp., had a $203 million operating loss in 2014. The company lost business in recent years because officials were preoccupied with an unwieldy implementation of a new information technology system for its forwarding business that led to poor service levels and customer dissatisfaction. The system, 1View, was designed to stitch together the company’s worldwide offices so that pricing and other decisions were more unified and transparent.
Several high-profile, cross-border mergers and acquisitions have been completed or are pending in 2015, including Kintetsu World Express, Inc.’s purchase of APL Logistics, XPO Logistics’s purchase of French 3PL Norbert Dentressangle and Con-Way Freight, FedEx’s proposed buy of TNT Express, the sale of Australian-based Toll Holdings to Japan Post, the acquisition of OHL by France’s Geodis, and American Fast Freight’s acquisition of Caribbean Shipping Services.
The September issue of American Shipper includes a profile of UTi and Feitzinger’s turnaround plans (“Rise of a fallen star“).
DSV to buy struggling UTi Worldwide for $1.35b
