A.P. Moller – Maersk announced Wednesday the acquisition of U.S.-based forwarder Pilot Freight Services in a $1.8 billion deal. The deal is the latest in a string of acquisitions that are transforming the company historically known as a shipping line into a global logistics outfit.
Headquartered in Glen Mills, Pennsylvania, 50-year-old Pilot provides first-, middle- and final-mile transportation, specializing in big and bulky freight delivery. The company operates 87 facilities throughout North America and an asset-light ground network with more than 2,600 employees.
Pilot is the second-largest residential big and bulky delivery company in the U.S., utilizing a network of third-party full truckload and less-than-truckload capacity, according to the press release. The company also provides managed transportation services for expedited freight. It has multiple locations in Western Europe and the Asia-Pacific market as well.
Pilot recently acquired non-asset expedited LTL provider American Linehaul to support its e-commerce capabilities.
The transaction is expected to expand Maersk’s (MAERB.C.EB) land-based logistics offering and will complement prior acquisitions of warehousing and distribution provider Performance Team and e-commerce fulfillment outfit Visible SCM. Maersk sees cross-selling opportunities and cost synergies across its U.S. portfolio, which includes Performance Team’s 58 facilities. The transaction rounds Maersk’s U.S. facility count to roughly 150 distribution centers, hubs and stations.
“In Maersk we continue our path to develop truly integrated logistics offering for our customers, offering them better visibility, more control and resilience in their supply chains,” said Vincent Clerc, CEO of ocean and logistics at A.P. Moller – Maersk. “Adding the capabilities of Pilot is especially important because it will allow us to create more exciting solutions for our customers and support them through the acceleration of the migration towards e-commerce.”
At the end of 2021, Maersk announced the $3.6 billion acquisition of Hong Kong-based contract logistics provider LF Logistics, which specializes in e-commerce fulfillment and inland distribution.
The $1.68 billion cash transaction ($1.8 billion enterprise value) values Pilot at 13.8x 2021 earnings before interest, taxes, depreciation and amortization prior to any deal synergies. Pilot’s final 2021 revenue is estimated at $1.5 billion with $130 million in EBITDA post lease liabilities. The company is expected to record a 4% operating margin in 2021.
Revenue and cost synergies are expected to generate a $100 million EBITDA run rate by 2024.
The transaction is subject to regulatory approval and is expected to close in the second quarter.
| Acquisition price | $1.8B enterprise value |
| Combined value | $447B enterprise value |
| Pilot Freight Services revenue run rate | $1.5B |
| Maersk’s revenue run rate | $62B |
| Expected revenue/cost synergies | $100M EBITDA run rate by 2024 |
| Earnings expectations | EBITDA margin 9%, EBIT margin 4% |
| Recent acquisitions by Maersk | LF Logistics, Performance Team, Visible SCM, HUUB, Senator International |
| Financing | cash |
“By investing in first mile, middle mile and last mile and integrating them, we meet a clear customer demand. This acquisition will add even more expertise and supply chain capacity to customers facing capacity constraints and multiple handoffs with providers in the B2C and B2B space,” Narin Phol, regional managing director at Maersk North America, stated.
Pilot is being acquired from private equity firms ATL Partners and British Columbia Investment Management Corp.
Maersk reported Wednesday full-year 2021 revenue increased 55% year-over-year to $62 billion with EBITDA tripling to $24 billion. However, the company’s 2022 guidance for EBITDA to be flat was below analysts’ expectations of $28 billion, according to Bloomberg. The company is calling for a strong first half with normalization in ocean shipping taking place early in the second half of the year.
“Throughout the unfolding of the pandemic, macro trends in the supply chain have accelerated, such as the increased shift towards e-commerce, especially for big and bulky items. This important shift will continue and necessitate the creation of new distribution networks and solutions to support companies adapting their supply chains to these new consumer demands,” the press release stated.
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