Kuehne + Nagel to acquire leading European logistics company ACR Logistics
Platinum acquired the logistics division from Hays plc in early 2004, established the organisation as a stand-alone company and relaunched it under the new name, ACR Logistics, assigning management responsibility to Xavier Urbain. Today, with around 15,000 employees, ACR Logistics ranks among the leading contract logistics providers in Europe. For the 11 months ended December 31, 2004, the company reported a turnover of EUR 1.2 billion and operating profit* of EUR 60 million. Headquarted in Paris, ACR Logistics operates at 140 locations in 11 countries, where it manages 2.2 million sqm of warehouse space.
Kuehne + Nagel will acquire the entire share capital of ACR Logistics for a purchase price of EUR 440 million. In addition, a net debt of EUR 50 million (based on UK GAAP) is assumed.
In terms of geographic reach and industry focus as well as its track record in management and IT excellence, ACR Logistics represents a perfect strategic fit for Kuehne + Nagel.
Geographic reach: Through its leading market position particularly in Great Britain, France, Italy and the Benelux, ACR Logistics complements Kuehne + Nagel’s contract logistics activities especially in countries where Kuehne + Nagel has no satisfactory presence. With the acquisition, Kuehne + Nagel’s logistics capabilities encompass some 50 countries with 5.5 million sqm of warehouse space under its management globally.
Industry focus: Whereas Kuehne + Nagel concentrates on the automotive and aviation, high-tech, pharmaceutical, industrial and chemical goods industries, ACR Logistics has a strong presence on the retail, telecommunication, industrial and fast moving consumer goods markets. With the merger, Kuehne + Nagel will be able to provide integrated services in all key market segments.
Management competence: The ACR Logistics management team’s many years of experience and its specialisation in contract logistics will significantly strengthen Kuehne + Nagel’s resources in Europe. Furthermore, management continuity will ensure the stability of customer relationships.
IT competence: ACR Logistics operates its own data centre and runs a software system that integrates transport and warehousing functionalities into a market-leading solution.
Due to the enlarged customer base, Kuehne + Nagel expects considerable growth from increased cross-selling activities, particularly in Eastern Europe and Asia, as well as the further strengthening of its global capabilities and profitability.
“This important acquisition marks a decisive step and provides us with an enhancement of our market position in contract logistics,” said Klaus Herms, CEO of Kuehne + Nagel International AG. “In combination with our strong sea, air and overland activities, ACR Logistics is the ideal partner for the provision of global, integrated logistics solutions to our customers across Europe.”
“We are delighted to be joining such a dynamic and successful group like Kuehne + Nagel,” commented Xavier Urbain, CEO of ACR Logistics. “I am convinced that our customers will welcome this development. They will benefit from the global presence and capabilities of Kuehne + Nagel and a broadened product offering. With joined forces, we will dedicate our efforts to playing a leading role in the global logistics market.”
Completion of the transaction is expected for January 1, 2006, subject only to the fulfilment of statutory antitrust conditions and Dutch works council consultation.
The transaction will be financed with a combination of existing cash and the placement of 1,700,000 shares (7.1 per cent of Kuehne + Nagel’s share capital) currently held by Kuehne + Nagel as treasury shares that will be offered to institutional investors, including to QIBs in the US through Rule 144A. The offering is intended to commence on October 17, 2005, and is expected to price on or about October 20, 2005, and will be accompanied by a management roadshow to institutional investors. Kuehne + Nagel has engaged Deutsche Bank, Frankfurt and UBS Investment Bank, Zurich as bookrunners for the share offering. Following this transaction, the Kuehne + Nagel free float will be increased to 41.4 per cent.