Danish logistics group DSV is to acquire California-based UTi Worldwide for US$1.35 billion in a move expected to increase its annual revenue by some 50 per cent.
In the year to 31st July 2015, UTi had sales of $3.9 billion and an adjusted EBITDA loss of $6m. It employs 21,000 people in 58 countries across more than 300 offices and 200 logistics centres.
The merged business would have pro forma 2014 revenue of some $13 billion and the combined workforce would grow to 44,000 people in 84 countries, 848 offices and 339 logistics facilities.
DSV chairman Kurt Larsen said: “We complement each other perfectly, both in terms of business activities and geography. Together, we will be even stronger and able to capitalise on business synergies as well as a greater global reach to the benefit of shareholders, customers and employees. We look forward to joining forces and welcoming our new colleagues from UTi to DSV.”
DSV expects the deal to strengthen its Air & Sea Division and increase its industry specific capabilities across all divisions.
“Furthermore, DSV will now be truly global within contract logistics and expand into road freight activities outside Europe. This will enable the company to offer its customers a broader range of services.”
Some 61 per cent of revenue of the combine group will come from Europe, Middle East and North Africa; 17 per cent from the Americas; 16 per cent from Asia; and and 6 per cent in Sub-Saharan Africa.
UTi chairman Roger MacFarlane said: “We are operating in an industry where increasingly scale is critical. Joining forces with DSV delivers substantially greater client value and many future opportunities for our people while it is financially very attractive for our shareholders. As a result, the Board of Directors of UTi has unanimously approved the agreement with DSV and strongly recommends that our shareholders accept the offer.”