GREENWICH, CT: XPO Logistics, which reported revenue of US$2.4 billion and a net loss of US$63.6 million in 2014, is to acquire French logistics company Norbert Dentressangle (ND) for €3.24 billion, including €1.08 billion of net debt, following agreement with the family-owned business to sell its 67 percent stake for €217.50 per share.
With US$2.6 billion of the deal underwritten by Morgan Stanley, the all-cash offer is expected to close in the second quarter this year subject to regulatory approvals. If successful, ND will de-list from Paris and London stock exchanges. The combined company will have annual revenues of US$8.5 billion.
XPO said it plans to become a leading e-commerce 3PL provider with a five percent share of an estimated €5 billion European market. Last year ND produced revenue of €242 million from e-fulfillment and reverse logistics business in the U.K., France and Spain.
ND customers include Danone, Carrefour, Zara, Marks & Spencer, Tata Steel, Renault, Mars, Tesco, Akzo Nobel, Pepsico and L'Oreal.
Bradley Jacobs, XPO CEO commented: "In Norbert Dentressangle, we are acquiring a company that has been meticulously built over the last four decades. I am extremely pleased that Norbert Dentressangle's executive leader, Hervé Montjotin, will serve as chief executive officer of our European business and president of the parent company. I look forward to working closely with Hervé as we execute XPO's global strategy."
XPO announced it will deploy its 'Freight Optimizer' IT platform in Europe to grow its brokerage business and the "expected combined annual technology spend of approximately US$225 million will be among the highest in the industry".
When complete, Jacobs said the merger will put XPO among the "top ten worldwide" logistics companies; make it the second largest global freight brokerage firm by net revenue; the third largest provider of intermodal services in North America; and the largest provider of last mile logistics for heavy goods in the U.S. and Canada.
Last year the XPO net loss to shareholders was US$107.4 million that excluded an after-tax cost of US$16.3 million related to the acquisitions of New Breed, Pacer and last-mile provider Atlantic Central Logistics.
The company said that as a result of the ND acquisition it "will evaluate equity capital raise to maintain a prudent capital structure".