TNT Logistics sale: more details emerge
published: cw 34, 2006 in Mergers & acquisitionsThe details of the sale of TNT Logistics have emerged as TNT Group?s management briefed analysts about the transaction.
The price of the sale at ?1.480bn was at the higher end of expectations but complicated by the 5% stake that TNT will retain in the new company. Asked why TNT retained the 5%, the management said that it was partly to reassure the workforce ? that the new business has a future? It also seems that Apollo drove a hard bargain. It is unclear how or when TNT Group will dispose of this stake.
The question of the future of the Wilson freight forwarding business also appears to be in doubt. Questioned about it yesterday TNT CEO Peter Bakker commented that TNT was still studying the potential synergies of Wilson and the Express freight networks, and that TNT would announce what the future of Wilson would be in the 3rd Quarter of this year.
As for Apollo there is no indication what it wishes to do with the business - secrecy is a characteristic of the Private Equity business. However it is clear that although Apollo does own some logistics businesses, such as US freight management company Pacer, it is not peculiarly focussed on the sector. The TNT management said that Apollo wished to use the Logistics business as ? a platform for growth? and intended to retain the existing management team as a stand-alone company.
The transaction to buy TNT Logistics should be finalised before the end of this year. It is also interesting to note that despite the sale of its Logistics division TNT does not appear to wish to leave the logistics business completely. In a presentation on the strategy of the remaining businesses of TNT, Peter Bakker laid heavy emphasis on the logistics services capability of the new TNT. Integral to this was serving commercial and industrial sectors.
Source: Transport Intelligence, August 25, 2006
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