MEMPHIS: In its latest quarterly filing with the U.S. Securities & Exchange Commission (SEC), FedEx has revealed it spent US$1.4 billion on the acquisition of 3PL reverse logistics specialist Genco and a further US$42 million to purchase e-trade facilitator Bongo International.
The company said the acquisitions will allow it to enter new markets, as well as strengthen current service offerings to existing customers and added: "We expect the goodwill of US$40 million associated with our Bongo acquisition will be entirely attributable to our FedEx Express reporting unit [and] the goodwill of approximately US$1.1 billion associated with our Genco acquisition will be primarily attributable to our FedEx Ground and FedEx Express reporting units."
FedEx issued a US$2.5 billion note of senior unsecured debt to fund the purchase of Genco that completed at the end of January this year.
With US$1.6 billion in annual revenue, the Pittsburgh-based company is a self-described "forefather in reverse logistics – providing triage, test and repair, remarketing and product liquidation solutions" to technology, consumer, industrial, retail and healthcare customers.
FedEx said the purchase of St. Petersburg, FL-based Bongo International would enhance its portfolio of global e-commerce solutions. Bongo enables global consumers and businesses to purchase on-line using a U.S. address for delivery to more than 200 countries worldwide.
In its SEC filing the company said it expects revenue and earnings growth to continue into the fourth quarter of 2015, driven by ongoing improvements in the results of all its business units. "We expect continued moderate global economic growth to drive volume and yield improvements" and added that expectations for its fourth quarter will be dependent on fuel prices and the growth of the global economy.
In the latest three months ending February 28, FedEx reported revenues of US$11.71 billion and a net income before taxes of US$909 million.