Following its recent announcement in which it said it entered into a definitive agreement to acquire APC Logistics, a Melbourne, Australia-based independently-owned global freight forwarder and customs broker serving Australia and New Zealand, global logistics services provider and freight forwarder C.H. Robinson Worldwide (CHRW) said on September 30 that the deal has been finalized.
APC and CHRW have had a long-standing exclusive agent relationship for business in Australia and New Zealand. Established in 1974, APC provides ocean and air global forwarding services, as well as customs brokerage and consultancy services for more than 3,000 customers and suppliers and has roughly 300 employees. APC had approximately $225 million (USD) in total revenue for fiscal year ending June 30, 2016.
In a previous interview with LM, CHRW President of Global Forwarding Mike Short said that APC this acquisition is an investment in a global growth strategy that continues to bring new opportunities to its customers and business.
“Acquiring APC Logistics furthers our commitment to our customers who are looking to move products into and out of Australia and New Zealand,” he said. “We expect to be able to further streamline their supply chains through this acquisition.”
Short added that as CHRW has had a longstanding exclusive agent relationship with APC in Australia and New Zealand to move its customers’ products into and out of both countries, coupled with APC’s status as a leader in freight forwarding into Australia and New Zealand and APC’s talented team, all collectively made APC an attractive acquisition target.
“APC Logistics brings a very talented team to C.H. Robinson through this acquisition. They also bring strong customer relationships,” Short said. “We look forward to integrating those into C.H. Robinson and continuing to improve our customers’ supply chains together.”
C.H. Robinson’s Global Forwarding business currently serves four continents and 37 countries, with approximately 3,500 employees and 109 offices worldwide, and is the top non-vessel operator (NVO) from China to the United States, according to a company statement, which added that global forwarding clients leverage C.H. Robinson’s considerable freight volumes to access available capacity at competitive rates.
With this acquisition now complete, CHRW said it will integrate APC Logistics into its proprietary single global technology platform, Navisphere, and also add the Oceania region to its Global Forwarding division.
“We are excited that APC Logistics is now part of C.H. Robinson,” said John Wiehoff, Chairman and Chief Executive Officer of C.H. Robinson, in a statement. “The marketplace response to this acquisition has been extremely positive since the announcement. We welcome APC’s customers and suppliers and our new colleagues to C.H. Robinson.”
Cowen and Co. analyst Jason Seidl wrote in a research note that his firm views this acquisition as further evidence that CHRW's global ambitions remain solidly intact.
“The APC acquisition will further strengthen the company's presence in forwarding, provide it more leverage with carriers in general and especially on Australia and New Zealand-based trade lanes,” he wrote. “We also view the transaction as low risk given the 16 years of history that APC and CHRW have together.”
Seidl also observed that CHRW’s acquisition of Phoenix ($807MM of gross revenue when acquired vs. APC's $251MM today) in late 2012 meaningfully increased the company's forwarding platform and brought with it many relationships that CHRW previously did not have, with APC Logistics being one of those relationships. He also noted that Phoenix and APC have been working together for 16 years in a revenue-share/agent-based relationship, with about 1/3 of APC's business from inbound freight from the US, 1/3 from China and another 1/3 from Europe, with the majority of its business on the ocean freight side.