GEODIS buys TNT Freight Management for 460 million euros

GEODIS buys TNT Freight Management for 460 million euros    Netherlands-based postal and express group TNT N.V. has agreed to sell its freight forwarding unit to the large French logistics company GEODIS for 460 million euros ($590 million).
   TNT Freight Management was created by the acquisition of Sweden’s Wilson Logistics Group for $320 million in August 2004. The company employs 2,300 people, with 126 offices in 28 countries. Last year the unit posted net revenue of 782 million euros ($1 billion), with air freight contributing almost 50 percent and sea freight 37 percent.
   TNT said it expects cash proceeds from the transaction of more than 400 million euros ($513 million) and book gain of more than 150 million euros ($192 million).
   Earlier this month the Amsterdam-based company completed the sale of its logistics division, TNT Logistics, to New York-based investment firm Apollo Management LP for 1.48 billion euros ($1.9 billion).
   “As part of our Focus on Networks strategy we studied the relationship to our express and mail delivery networks and decided that selling the freight management business is the best way forward and will allow TNT to focus on the many growth opportunities that our network businesses offer,” said Peter Bakker, TNT’s chief executive officer.
   Pierre Blayau, chairman and CEO of the GEODIS group, said: “We are very excited by the acquisition of TNT Freight Management, which is a valuable company and a perfect fit with GEODIS business model.”
   Blayau added that GEODIS will retain Jeff Hoogesteger as CEO of TNT Freight Management.
   GEODIS financed the deal through a syndicated loan arranged and underwritten by BNP Paribas, a portion of which will bridge a rights issue of about 150 million euros ($192 million), expected to be launched in the second quarter 2007.
   “This transaction, made possible by our capital structure, which we have made healthy after six years of work, is in line with our international development strategy of expanding in activities of strong growth. Freight forwarding is an increasingly important activity in transport and logistics. Our new critical mass makes us more competitive and better positioned to serve our clients,” Blayau said.
   GEODIS expects the takeover to help double its revenue from freight forwarding to about 1.6 billion euros ($2.05 billion), putting it in the top five freight forwarders in Europe and among the top 10 globally. The transaction will also balance its portfolio of activities:
   * Groupage/Express, 35.5 percent.
   * Freight forwarding, 35.6 percent.
   * Logistics and associated transport, 28.9 percent.
   Based on 2005 figures, the enlarged GEODIS group will have annual revenue of 4.4 billion euros ($5.6 billion), and 26,000 employees worldwide.
   The French group anticipates integration costs of up to 30 million euros ($38 million). Expected synergies represent about 35 million euros ($45 million) per year, of which a significant portion is expected to impact the results of 2008, GEODIS said.
   The parties expect the deal to be completed by the first quarter of 2007, subject to the approval of European competition authorities.