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Denmark acquires another logistics asset

HEDEHUSENE, Denmark: Supply chain management company UTi Worldwide is to be acquired by DSV for US$1.35 billion. The acquisition is expected to complete by March 2016 and is subject to regulatory approvals.

In December last year UTi denied talks with DSV had gone beyond an "exploratory stage" and at the time said no further meetings were planned. Nine months later, UTi's stock had fallen to US$4.75 a share from a high of US$10.25 in June. Current unit price is US$7.13.

In mid-2015 UTi reported its EBITA margin had declined from a high of US$213 million in Fiscal 2012 to US$18 million by the end of the first quarter of Fiscal 2015 and forecast US$8 million by the same period in Fiscal 2016. Between 2012 and 2015 net revenues had fallen from US$1.7 billion to US$1.5 billion.

UTi 2Current revenue is split 33 percent contract logistics and distribution; airfreight forwarding 30 percent; ocean forwarding 25 percent and Customs brokerage five percent.

The company employs 21,306 people in 309 owned locations in 248 cities in 58 countries. Revenue per region is 33 percent Americas; 27 percent Asia Pacific; 24 percent EMENA and 16 percent Africa.

Commenting on the DSV purchase, UTi CEO Ed Feitzinger said: "The potential combination of our two businesses has a strong cultural fit, aligned strategy, and a complementary client base and geographic footprint. We have the opportunity to draw on the current strengths and scale of both companies to bring solutions to our clients that we could not have delivered on our own.

DSV is a global supplier of transport and logistics services and employs 23,000 people in 530 offices and 130 logistics facilities in 75 countries. The publicly quoted company reported annual revenues of US$8.7 billion in 2014.

Kurt Larsen, chairman of the DSV board, noted: "This is a great step for both UTi and DSV. I know that the combined business and workforce will reach new levels together – we will create a stronger company with an expansive footprint in the 3PL space and an exciting value proposition for our customers."

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