The Brink’s Co. confirms $1.1 billion sale of BAX Global
Richmond, Va.-based security firm The Brink’s Co. has agreed to sell its freight-forwarding arm BAX Global to Deutsche Bahn AG for about $1.1 billion in cash.
The announcement, made to the New York stock exchange early Wednesday morning, confirmed recent press speculation linking the Irvine, Calif.-based BAX Global with a takeover by the German state-owned rail operator.
BAX Global has nearly 500 offices worldwide with approximately 12,000 employees. In 2004, BAX Global posted revenue of $2.44 billion and an operating profit of $56.2 million.
Deutsche Bahn is also the parent company of international forwarding giant Schenker.
“BAX fits our strategy perfectly and is an ideal complement to our logistics subsidiary Schenker. With these two companies, DB AG is now one of the world’s leading companies in the transportation and logistics sector,” said Hartmut Mehdorn Deutsche Bahn’s chairman and chief executive officer.
As a result of the BAX Global acquisition, Deutsche Bahn said its transportation and logistics division DB Logistics will increase its annual revenue to just under 15 billion euros (about $17 billion) from $2.4 billion in 2004.
“With BAX, we will significantly expand our position in air and sea freight, which are particularly important for the global supply chains that are constantly growing in demand,” said Thomas Held, chairman and CEO of Schenker. “At the same time, we will substantially enhance our presence on the North American market and particularly in Asia. In contract logistics, the business of the future, we will also be able to position ourselves even more effectively. Last but not least, the new setup will further strengthen our leading position in European land transport, since we provide BAX customers in the U.S. with direct access to all the markets in Europe.”
The Brinks Co. said its net proceeds after taxes and expenses related to the transaction are expected to be approximately $900 million.
“This sale will mark an important financial and strategic milestone for The Brink’s Co. Going forward, our company will be focused entirely on security-related services,” said Michael Dan, chairman, president and CEO of The Brink’s Co.
The two parties expect to conclude the transaction by the end of the year, subject to conditions and regulatory approvals, including reviews under the Hart Scott Rodino Act and the European Union’s laws and regulations, as well as the approval of the German Ministry for Transport.