Maersk set to acquire Pilot Freight Services
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A.P. Moller - Maersk has announced “the intended acquisition" of Pilot Freight Services (Pilot), a US-based first, middle and last mile as well as border crossing solutions provider. The company, who specialise in the big and bulky freight segment in North America for B2C and B2B distribution models, are currently owned by ATL Partners, a sector-focused Private Equity firm in New York and British Columbia Investment Management Corporation (BCI), one of the largest institutional investors in Canada.
In a statement, Maersk explained that its motivation behind the acquisition was to extend its integrated logistics offering deeper into the supply chain of its customers.
It believes the deal for Pilot Freight Services will also “complement the earlier acquisitions already made to provide integrated logistics solutions in North America”, especially with Performance Team (PT) (B2B warehousing and distribution) and Visible SCM (e-commerce warehousing and parcel distribution). This, it is said, “will create tremendous new, end-to-end supply chain performance capabilities”.
The shipping giant adds that Pilot will be adding specific new services within the fast growing big and bulky e-commerce segment, thus increasing cross-selling opportunities. It will also create “significant cost synergies by leveraging capabilities across the different parts of service solutions”.
“In Maersk we continue our path to develop truly integrated logistics offering for our customers, offering them better visibility, more control and resilience in their supply chains. Adding the capabilities of Pilot is especially important because it will allow us to create more exciting solutions for our customers and support them through the acceleration of the migration towards e-commerce. Furthermore, it will open significant cost synergy opportunities by leveraging the capabilities we have already developed in the network,” says Vincent Clerc, CEO of Ocean & Logistics, A.P. Moller – Maersk.
According to Maersk – the transaction price is USD 1.68bn – equivalent to an enterprise value of USD 1.8bn post IFRS-16 lease liabilities, reflecting a pre-synergy EV/EBITDA multiple of 13.8x based on an estimated post IFRS-16 EBITDA of approximately USD 130m for full-year 2021. The acquisition is subject to regulatory review and approval which, is expected to be obtained by Q2 2022. Both companies will operate as independent businesses and run their operations as usual until that time.
The Danish shipping behemoth believes that an increased shift towards e-commerce, especially for big and bulky items, is an “important shift” that will continue and “necessitate the creation of new distribution networks and solutions to support companies adapting their supply chains to these new consumer demands”. This, Maersk argues, applies to numerous B2C vertical segments such as retail, home furnishings and consumer electronics as well as B2B segments such as aerospace, automotive and healthcare.
Pilot operates a North American facilities-based transportation network of 87 stations and hubs through which freight is transported and distributed to end customers. The company uses mainly 3rd party providers of trucking and has access to controlled capacity which facilitates a high quality first, middle and last mile service offering. The scope encompasses full truckload (FTL) and less-than-truckload (LTL) for both B2C and B2B distribution including heavy and bulky shipments with white glove service with a focus on expedited and time definite services.
“By investing in first mile, middle mile and last middle and integrating them we meet a clear customer demand. This acquisition will add even more expertise and supply chain capacity to customers facing capacity constraints and multiple handoffs with providers in the B2C and B2B space. After completion of this transaction, we will be able to help them install stronger, more integrated supply chains with better visibility and better outcomes for consumers. We look forward to welcoming the Pilot team aboard the A. P. Moller – Maersk family,” said Narin Phol, Regional Managing Director at Maersk North America.
The announcement from Maersk comes just over a week after CMA CGM announced it was set to acquire French last mile operator Colis Privé. Therefore, it appears that the big pockets of the shipping giants are being used to make acquisitions across the supply chain, including last mile operators.
Photo: Pilot press materials