M&A interest continues in the US logistics market

Despite PricewaterhouseCooper’s 2014 outlook of one not “expected to set records”, second-quarter mergers and acquisitions (M&A) activity did pick up from first quarter. Indeed, US logistics and transport M&A activity continues to be of much interest and a market of continued growth. The most recent evidence of this is UPS’ acquisition of i-Parcel, a niche provider of cross-border e-commerce solutions. The acquisition complements UPS’ existing capabilities from the US and UK.

As such, cross-border e-commerce is on the rise throughout the world and this acquisition further enhances UPS’ services in this space by extending existing capabilities from the US and UK to over 100 countries.

In addition to the UPS acquisition of i-Parcel, UK-based MetaPack, a provider of e-commerce technology delivery services acquired Atlanta, Georgia-based ABOL Software, a provider of multi-carrier shipping software in North America. Also, US-based SEKO Logistics acquired an equity stake in UK-based Metakinectic, an e-commerce marketing and design agency furthering its reach within e-commerce by merging it into its Red Hot Penny subsidiary which creates online storefronts.

e-commerce is just one area in which there is M&A activity. Another area is within the energy sector. A recent example is Daseke’s acquisition of Lone Star which illustrates this trend as well as that for cross-border operations between Mexico and the US. In a broader sense, the acquisition of Lone Star is also a result of issues facing the trucking industry as a whole – tighter driver market and rising freight demand. In fact, Knight Transportation which acquired Barr-Nunn Transportation around the same time as Daseke bought Lone Star is due to the overall changing trucking environment.

e-commerce, the energy sector and the current US trucking environment are some of the areas in which M&A interest lies for logistics and transport providers. The improving US economy has resulted in further interest from global companies to expand their reach into this market and along with these areas of interest there are others including healthcare, warehousing and fulfillment and more.

For more on this topic, join Ti’s Senior Analyst, Cathy Roberson as she discusses “The Changing M&A Environment – What’s Next” October 23 at the St. Louis Chapter of CSCMP. For more details please click here.