DSV to acquire ABX Logistics
Danish logistics group DSV A/S has entered into an agreement with 3i Group plc and 3i funds, the management team of Belgium’s ABX Logistics and other shareholders, to buy all the shares in ABX parent company XB Luxembourg Holdings 1 S.A.
The aggregate price of the entire share capital, on a debt and cash free basis is 750 million euros ($1.16 billion). DSV said it would finance the acquisition price through bridge financing facilitated by the current main banks of the group. The transaction is expected to complete in the third quarter of 2008 and is subject to approval by the relevant competition authorities.
The parties said the merger of DSV and ABX will create a company with pro-forma annual revenue of 6.5 billion euros ($9.5 billion) and a workforce of 25,000, better positioning it to counter increasing competition in the transport and logistics sector, including from new Asian players.
The management teams highlighted the geographic fit between the Northern European presence of DSV and the South and Western Europe presence of ABX
DSV and ABX will integrate their activities in air and sea, road and contract logistics to create operating and administrative synergies. The integration is expected to be fully implemented before the end of 2011, when the margins of ABX are expected to be on a level with the margins realized by the various divisions of the DSV Group.
Brussels-based ABX posted consolidated revenue of 1.8 billion euros in 2007, employs 6,700 full-time employees in 35 countries and operates in 65 other countries through agents, partners and joint ventures. As part of the terms of the agreement, the ABX headquarters will be maintained in Brussels through at least 2011.
“It is a great pleasure that we have succeeded to unite ABX and DSV,” said Kurt K. Larsen, chief executive officer of DSV. “The match between the two organizations is almost ideal, both geographically and in respect of activities. For a number of years, ABX has been at the top of the list of potential combination candidates.”
Laurent Levaux, CEO of ABX, said: 'We are excited to join our forces with DSV and to enhance our presence in a number of regions around the world. There is a strong cultural fit between our companies and cultures. Beyond our geographical complementarities, both CEOs share the same values of customer focus, entrepreneurship, and managers’ empowerment.
“This strategic alliance is also excellent news for Belgium, which created the ABX Group through the Belgian Railways between 1998 and 2001 and is a natural hub for logistics activities and multimodal transportation. By teaming up with DSV, with whom we have a long standing business relationship, ABX will be able to further contribute to developing Belgium’s role as a global transportation and logistics center of choice.”
Robert Van Goethem from 3i Partner said: 'The freight forwarding market continues to undergo considerable consolidation. Today’s merger of ABX and DSV will significantly strengthen the growth potential of ABX’s activities as it will be able to benefit from a much larger network effect. ABX’s and DSV’s networks are indeed very complementary in Europe and on a worldwide basis.
“The timing of today’s (June 21) transaction was not planned nor anticipated when 3i, ABX management and the other shareholders bought the business. However the business is well ahead of its milestones. The board of ABX and all shareholders decided a merger between DSV and ABX provided an excellent opportunity as the next phase of development for ABX’s activities and that it is in the best interest of the company, its stakeholders, its management and the local Belgian economy.”