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XPO to buy Norbert Dentressangle and become a top ten logistics company

Reuters and Steve Rogerson
April 29, 2015
 
XPO Logistics has agreed to buy France's Norbert Dentressangle for $3.53bn, including debt, in a deal it says will make it one of the top ten logistics company in the world. It will also see XPO’s Freight Optimizer track-and-trace technology deployed more widely in Europe.
 
The deal will give Connecticut-based XPO access to Europe's largest fleet network and push the company's annual revenue to about $8.5bn, XPO said.
 
The deal will give XPO global scale in freight brokerage and managed transportation, two of its core services, with the ability to employ technology and best practices. XPO intends to deploy its proprietary Freight Optimizer platform in Europe to facilitate carrier sourcing and customer service. Freight Optimizer provides the sales team with tools to source the optimal carrier capacity for each load. Big data specialists have created algorithms that channel truck information from multiple sources, weighted by cost and performance to speed procurement. Robust track and trace technology informs customer communications while freight is in transit.
 
Headquartered in Lyon, France, Norbert Dentressangle has 662 locations and approximately 42,350 employees, and serves a blue chip customer base that includes some of the world's largest companies. Norbert Dentressangle's transportation and logistics services complement XPO's offerings in contract logistics, freight brokerage and global forwarding. The company had €5.1bn in pro-forma trailing 12-month revenue for the year-ended December 31, 2014.
 
The acquisition will be the biggest in the company's history, according to Thomson Reuters data, and its second this year after its purchase of UX Specialized Logistics.
 
"This is a defining moment in the growth of XPO,” said Bradley Jacobs, chairman and chief executive officer of XPO Logistics. “Our planned acquisition of Norbert Dentressangle will catapult XPO to a top ten global logistics company. It will more than triple our EBITDA to $545m and increase our revenue to about $8.5bn 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. In Norbert Dentressangle, we are acquiring a company that has been meticulously built over the last four decades.”
 
XPO said the total transaction value of about €3.24bn would include €1.08bn of net debt.
 
Founder Norbert Dentressangle will sell his family's 67 per cent stake in the Lyon-based company for €217.50 per share, a 34 per cent premium to the stock's close on Monday. XPO will launch a tender offer for the remaining shares at the same price.
 
Morgan Stanley has provided a financing commitment of up to $2.6bn, XPO said.
 
Following the deal, Norbert Dentressangle chief executive Hervé Montjotin, will be chief executive of XPO's European business and president of the parent company.
 
“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,” said Jacobs. “I look forward to working closely with Hervé as we execute XPO's global strategy."
 
Montjotin added: "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."