Transportation and Logistics

Transportation and Logistics M&A Outlook 2010

The transportation & logistics (T&L) industry finished up 2009 on an uphill swing, with 33 deals totaling $48.5 billion in Q4 2009 compared to only 26 deals totaling $8.1 billion in Q3 2009. In addition, fewer of these deals involved distressed companies. There was also increased mergers & acquisitions (M&A) activity from financial investors, accounting for roughly half of all M&A activity in the year.

Most M&A activity for 2009 involved smaller deals, mostly lower midmarket, with transaction values not disclosed. We expect this trend to continue through 2010. The volume of higher-value transactions—$500 million and above—will not pick up until well into a broad economic recovery; and we don’t expect that to occur until late 2010 at the earliest. The early deals likely will involve targets with valuable or promising innovations, either within the product or the process (internal and external). So-called “smart equipment” will continue to garner attention—particularly as communications among supplier, company and consumer become more digitized.

Rail sector deals gained increasing prominence relative to total volume of sales in 2009 (59 percent as opposed to 16 percent in 2008). This trend likely will continue as consumers and companies search for efficient means of continental transport.

PriceWaterhouseCoopers writes: “As the economy continues to struggle, many logistics service providers are working to find innovative solutions for balancing capacity with demand. Winners will include companies that look inward to achieve the efficiencies necessary to find and sustain cost cuts, improve performance, and compete in an increasingly automated world.”

SOURCE: PriceWaterhouseCoopers

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• Transportation and Logistics M&A Outlook 2009
• Transportation and Logistics M&A Outlook 2008