Germany’s national rail operator, Deutsche Bahn [DBN.UL], plans to buy U.S. logistics firm BAX Global, a unit of security group Brink’s Co., for up to 1 billion euros ($1.2 billion) to boost its global coverage, sources at Deutsche Bahn said on Monday.

“The price is to be between 800 million and 1 billion euros,” a source familiar with the negotiations told Reuters. The figures were confirmed by another source at Deutsche Bahn with the sources expecting the purchase is to be concluded at a special meeting of Deutsche Bahn’s supervisory board on Saturday.

Deutsche Bahn declined to comment officially on the deal.

Buying Irvine, California-based BAX Global would boost Deutsche Bahn’s U.S. competitiveness and strengthen its logistics arm Schenker by adding air and sea transport from the United States to Europe and Asia, pressuring rivals like Deutsche Post and Kuehne & Nagel.

A representative from Brink’s, known for its armored car and home security business, was not immediately available for comment and BAX Global spokeswoman Marie Connelli said the company does not comment on market speculation and rumor.

Brink’s shares jumped $4.21, or nearly 10 percent, to close at $46.71 on the New York Stock Exchange on Monday, having risen from a year low of $29.73 in May.

Brink’s share price has risen since its largest shareholder, New York-based hedge fund, MMI Investments LP, suggested in April that a sale of BAX Global would improve Brink’s share price and help pay off its legacy costs.

BAX Global, which specializes in heavy freight, arranges for the delivery of overnight and second-day freight from business to business in more than 130 countries. It uses its own aircraft in North America and employs other carriers elsewhere. It also offers supply chain management services.

MMI Investments estimated in a U.S. Securities and Exchange Commission filing that the BAX unit could fetch proceeds of up to $500 million, roughly 10 times its price-to-cash flow.

“We have long felt that Brink’s Co. would achieve a higher value and better multiple if it was a pure security play so we really hope this deal comes through,” MMI Investments’ President Clay Lifflander told Reuters on Monday.

He said Brink was trading at a multiple of about six times its earnings before interest, tax, depreciation, and amortization (EBITDA) — a measure of a company’s cash flow — – compared to other international security firms trading at about 8.5 times their EBITDA.

Lifflander said he was unable to confirm rumors that a sales process for BAX Global which has 12,000 staff and sales last year of $2.4 billion, began in June.

Source: Reuters

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