Another major acquisition is in the works in the logistics sector. This time, French firm Geodis and U.S.-based OHL (Ozburn-Hessey Logistics) are tying up to increase scale. Geodis is a subsidiary of SNCF Logistics, which is the freight services arm of SNCF Group, the French rail operator. OHL, which got its start in Tennessee in 1951, has more than 8,000 employees, 120 distribution centers in North America and 36 million square feet of warehouse space. OHL services include transportation, warehousing, customs brokerage, freight forwarding and import/export consulting services.
Geodis is buying the American company from private equity firm Welsh, Carson, Anderson and Stowe for an undisclosed sum. WCAS has organized 16 limited partnerships, with total capital in excess of US$22 billion. The Wall Street Journal quoted sources familiar with the deal as saying that the purchase price was in the neighborhood of $800 million. Geodis operates in 67 countries with five lines of business: Supply chain optimization, freight forwarding, contract logistics, distribution, and express and road transport. It has more than 120,000 customers, 30,000 employees and annual revenue around €6.8 billion.
Geodis operates under one brand, GEODIS. In time, OHL will be rebranded the same. Its acquisition of OHL is subject to regulatory approvals. Geodis expects to fund the transaction with cash and through new debt. This acquisition comes on the heels of UPS’s purchase of Coyote Logistics from private equity firm Warburg Pincus for US$1.8 billion, and XPO Logistics’ US$3.56 billion takeover of Nobert Dentressangle of France. XPO is U.S.-based, so the Geodis/OHL transaction is the opposite, with a French company acquiring a U.S. one.