Sunday 25th Oct 2020 - Logistics & Supply Chain

US logistics group XPO to buy Norbert Dentressangle

US group XPO Logistics is to buy Norbert Dentressangle in a deal worth €3.24 billion (£2.32bn). It has agreed to buy the 67 per cent of the company shares owned by Norbert Dentressangle, the founder of the business, and will launch a tender offer for the remaining shares.

Bradley Jacobs, chairman and chief executive officer of XPO Logistics, said: “This is a defining moment in the growth of XPO. Our planned acquisition of Norbert Dentressangle will catapult XPO to a top ten global logistics company. It will more than triple our EBITDA to $545 million (£355m) and increase our revenue to about $8.5bn (£5.5bn) upon completion of the tender offer, nearly achieving our 2017 financial targets two years ahead of plan. The acquisition of Norbert Dentressangle is a major leap forward, but we’re still in the early innings of our long-term growth plan.”

XPO said the deal was not conditioned on financing. “Morgan Stanley has provided a financing commitment for up to $2.6bn (£1.7bn). XPO has over $1bn (£650m) in cash and an undrawn $415m (£270m) ABL revolver.”

The move comes less that year after Dentressangle completed the £452m takeover of US logistics group Jacobson.

Dentressangle chief Hervé Montjotin will become as chief executive officer of XPO’s European business and president of the parent company. “I look forward to working closely with Hervé as we execute XPO’s global strategy,” said Jacobs.

XPO, which is based in Greenwich, Connecticut, reckons it is the second largest freight brokerage in North America, the third largest provider of intermodal services, and the largest manager of last mile logistics for heavy goods.

The company was founded as Express-1 in 1989, and in 2011 a new leadership team took over and started building XPO into a multi-billion dollar company.

It has been growing rapidly: revenue last year was $2.4bn (£1.6bn) – a 235.6 per cent increase from 2013. However, it produced a net loss of $63.6m (£41.4m) against $48.5m (31.6m) in 2013.

During 2014, it completed three strategic acquisitions: Pacer International, ACL and New Breed Logistics.

It has 201 locations in the US, employs some 10,000 people, and has more than 4,900 independently owned trucks under contract. It has relationships with 30,000 other carriers.

Dentressangle was founded by 24 year old Norbert Dentressangle in 1978. It has grown dramatically since then with takeovers of Christian Salvesen and TDG in the UK. Dentressangle has just reported sales of €5.1bn (£3.65bn) for the year to 31 December 2014. XPO has undertaken not to reduce the number of full time employees in France for at least 18 months, and will maintain the European HQ in Lyon.

Montjotin said: “By joining XPO, we will become part of an organisation that shares the ambition that has guided us since the creation of Norbert Dentressangle 36 years ago: to become a global partner able to effectively support our customers in the management of their supply chains. As XPO’s platform for growth in Europe, we can continue to pursue this goal on an even larger scale, to the benefit of our customers and employees. I am proud to lead this growth for XPO, together with the current management board.”

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