C.H. Robinson to buy logistics rival Phoenix for $635 million
Tue Sep 25, 2012 8:14am EDT
(Reuters) - C.H. Robinson Worldwide Inc (CHRW.O), a third-party provider of freight transport, said it would buy smaller rival Phoenix International for $635 million in cash and stock to expand its international freight forwarding business.
C.H. Robinson, which arranges freight transport through its 53,000 contracted carriers, said it expects the deal to be modestly accretive in the first year.
The company, which has a market value of about $9.30 billion, said it would pay $571.5 million in cash and the remaining in newly issued C.H. Robinson stock.
Sources had told Reuters in June that Chicago-based Phoenix International was exploring a sale that could fetch as much as $500 million from global logistics companies, including C.H. Robinson and United Parcel Service (UPS.N).
CJ Korea Express (000120.KS), South Korea's biggest logistics company, had told Reuters last month that it may bid for Phoenix International.
Founded by Bill McInerney in 1979, Phoenix arranges shipments for customers via air and ocean. It has more than 2,000 employees in 74 offices worldwide and is owned by McInerney and other executives and employees of the company.
Phoenix generated net revenue of about $161 million in the fiscal year ended June 30. C.H. Robinson reported full-year revenue of $10.34 billion for the year ended December 2011.
"We see significant long-term opportunity in international forwarding as global trade expands, scale and technology continue to become more important, and shippers increasingly look to transportation providers to provide global services," C.H. Robinson Chief Executive John Wiehoff said in a statement.
C.H. Robinson bought Poland's Apreo Logistics for an undisclosed amount early this month.
The company said it will use existing cash and plans to enter into a revolving credit facility with major banks to finance the cash portion of the Phoenix deal, which is expected to close in the fourth quarter.
(Reporting by Bijoy Koyitty in Bangalore; Editing by Supriya Kurane)