Geodis Acquires Ozburn-Hessey

Updated: 8/17/2015

French logistics giant Geodis said on Monday that it was buying the US distribution company OHL (Ozburn-Hessey Logistics), which has an annual turnover of $1.2 billion (1.1 billion euros).

The deal, for an undisclosed sum, gives Geodis - which is owned by France’s national rail firm SNCF - a strong foothold in the handling of clothing, electronics, food and pharmaceuticals in North America, where OHL is a substantial player.

“Bringing together the complementary customer portfolios and capabilities, combined with the great cultural fit of both companies makes outstanding strategic sense for Geodis,” said its CEO Marie-Christine Lombard.

OHL, owned by investment fund Welsh, Carson, Anderson & Stowe (WCAS), has more than 120 distribution centres across North America and employs over 8,000 people.

Lombard said that over time OHL would be absorbed into the Geodis brand.

Its parent company SNCF Logistics said earlier this year that it was aiming for growth of 20 percent between now and 2020, mostly abroad and through consolidating Geodis.

Previously Reported:
French shipping and transit company Geodis SA has aquired U.S. contract shipping provider Ozburn-Hessey Logistics,in what would be the latest in a string of logistics tie-ups this year, people familiar with the deal said.

Private equity firms Welsh, Carson, Anderson & Stowe and Hyde Park Holdings LLC are selling the U.S. logistics company.

The rise of e-commerce has increased companies’ demand for shipping, making logistics companies more valuable. Private equity firms have recently been cashing in on that trend.

The price in this deal represents a multiple of about 10 times Ozburn-Hessey Logistics’ $80 million of annual earnings, the people said.

The deal is slated to be announced in the coming weeks according to a person familiar with the matter. The people asked not to be named because the deliberations were private.

Geodis and Ozburn-Hessey Logistics did not immediately respond to requests for comment. Neither of the New York-based private equity firms responded to requests for comment.

Founded in 1951 and based in Brentwood, Tennessee, Ozburn-Hessey Logistics has more than 120 distribution centers. It has customers in the apparel, electronics, healthcare, food and beverage, and consumer packaged goods industries. Clients include Starbucks Corp, Apple Inc, Red Bull and General Motors Co.

In April, France’s Norbert Dentressangle SA agreed to sell itself to Stamford Connecticut-based XPO Logistics Inc in a deal valued at $3.53 billion, including debt, making XPO one of the top 10 logistics companies in the world.

Also in April, FedEx Corp announced a deal to buy Dutch delivery service company TNT Express for 4.4 billion euro ($4.9 billion).

FedEx’s main rival, package delivery company, United Parcel Service Inc agreed to pay $1.8 billion for Chicago-based Coyote Logistics from private equity firm Warburg Pincus to expand its full-truckload services in July.

Related: Logistics Mergers & Acquisitions Wave Continues