Geodis set to buy Ozburn-Hessey Logistics for $800m
August 25, 2015:
French shipping and transit company Geodis is near a deal to pay close to $800m for US contract shipping provider Ozburn-Hessey Logistics, in what would be the latest in a string of logistics tie-ups this year, people familiar with the deal said.
Private equity firms Welsh, Carson, Anderson & Stowe and Hyde Park Holdings are selling the US logistics company. The rise of e-commerce has increased companies' demand for shipping, making logistics companies more valuable. Private equity firms have recently been cashing in on that trend.
The price in this deal represents a multiple of about ten times Ozburn-Hessey Logistics' $80m of annual earnings, the people said.
The deal is slated to be announced in the coming weeks according to a person familiar with the matter. The people asked not to be named because the deliberations were private.
Geodis and Ozburn-Hessey Logistics did not immediately respond to requests for comment. Neither of the New York-based private equity firms responded to requests for comment.
Founded in 1951 and based in Brentwood, Tennessee, Ozburn-Hessey Logistics has more than 120 distribution centres. It has customers in the apparel, electronics, healthcare, food and beverage, and consumer packaged goods industries. Clients include Starbucks, Apple, Red Bull and General Motors.
In April, France's Norbert Dentressangle agreed to sell itself to Stamford Connecticut-based XPO Logistics in a deal valued at $3.53bn, including debt, making XPO one of the top ten logistics companies in the world.
Also in April, FedEx announced a deal to buy Dutch delivery service company TNT Express for €4.4bn ($4.9bn).
FedEx's main rival, package delivery company United Parcel Service, agreed to pay $1.8bn for Chicago-based Coyote Logistics from private equity firm Warburg Pincus to expand its full-truckload services in July.