CEVA group wins bidding war for EGL
EGL Inc., parent company of Houston-based Eagle Global Logistics, said Thursday it has agreed to sell the company to New York-based private equity firm Apollo Management for $47.50 per share, or nearly $2 billion.
Apollo spent the same amount ($1.9 billion) last year to acquire TNT Logistics from the Dutch postal and express group TNT N.V. and renamed the company CEVA Logistics. Assisted by CEVA Chief Executive David Kulik, Apollo sought Eagle to provide a freight forwarding complement to its contract warehousing service and become a more integrated global logistics company that can compete with Deutsche Post, UPS, Kuehne + Nagle, and Deutsche Bahn, the German rail and logistics group.
The Apollo-CEVA group beat out a management effort led by Jim Crane, EGL’s chairman and CEO, and two investment groups for the company. EGL’s board originally agreed to let the Crane consortium take the company private, but Apollo countered with its own offer, precipitating a bidding war after several large shareholders complained the company accepted the Crane deal too quickly.
The proposed merger agreement must go to shareholders for approval and is subject to regulatory approvals. The companies said they expect the transaction to close in the third quarter this year.
“After careful consideration, our Special Committee has concluded that this transaction is in the best interest of EGL and maximizes value for all of our shareholders,” EGL board member Milton Carroll said in a statement.
EGL said it has paid Crane, the company’s largest shareholder, and his investors, Centerbridge Partners L.P. and The Woodbridge Co. Ltd., a $30 million fee for terminating the original agreement.
The purchase price represents a premium of about 60 percent over $29.78, the closing price of EGL stock on Dec. 29, the last trading day before an initial proposal was made by the Crane group to take EGL private. It is also represents a 25 percent premium over the $38.00-per-share consideration that was to be paid under the Crane group’s agreement.
Kulik said in a joint statement that EGL’s management team would stay on to continue running the company.
“The acquisition of EGL is a transforming event for CEVA and increases the ability of both companies to serve its existing customers,” Kulik said.
“We are very excited to have many of the senior leadership at EGL join CEVA as our partners, and look forward to working together to build the leading transportation logistics provider in the world. Maintaining the continuity of EGL’s senior management team and its employees around the world is a priority, and CEVA is committed to ensuring a smooth transition of ownership and continuing the strong relationships EGL has with its transportation partners.'
CEVA expects all existing operations at EGL to remain unchanged following the merger, and will be managed under a new freight management division, headquartered at EGL’s existing location in Houston.
CEVA group wins bidding war for EGL
