Long Beach-based UTi says no discussions are currently underway with Danish forwarder.
The Long Beach, California-based logistics company UTi said that it held “exploratory conversations” about being acquired by the Danish forwarder DSV, but that the discussions “never progressed beyond a preliminary stage.”
UTI made the statement after the Bloomberg news service reported that UTi is in “advanced talks to sell itself to DSV.”
UTi said the meetings were at DSV’s request and that there are currently no discussions taking place between the two companies.
For its part, DSV said it initiated acquisition talks, but that discussions are no longer ongoing.
In an investor note, Stifel’s David Ross said the news that talks are no longer taking place could mean that UTi is pursuing talks with another company, or it could mean that UTi is no longer interested in a merger.
“But with the rollout of its 1View system for global freight forwarding largely complete and margin expansion ahead, we believe UTi’s results should continue to improve,” he wrote. “We further believe that, in this hot M&A market, UTi is an attractive asset to anyone looking to establish a global presence in freight forwarding and/or contract logistics.”
As justification for his acquisition-target comments, Ross pointed to UTi’s status as a top-tier freight forwarder, one of the few that could be for sale; its footprint in the United States with access to major markets; and its growth potential.
The turnaround in the market will also be a boost for UTi.
“The global airfreight market has strengthened this fall, and forwarding pricing appears to be improving, which is a positive development for the company after years of declining revenues and yield pressure in airfreight,” he wrote.
UTi held merger talks with DSV
