C.H. Robinson Worldwide Inc. (NASDAQ:CHRW) announced its intention to acquire APC Logistics for around AUD 300 million (approximately $225 million). The acquisition is dependent on customary closing conditions. Based in Australia, APC logistics is a popular name in the logistics industry, providing freight forwarding and customs brokerage services. If approved, the deal is expected to be accretive in 2016 and 2017 and will likely be financed via cash and funds from C.H. Robinson’s existing revolving credit facility.
APC Logistics Background
APC Logistics, founded in 1974, is a privately held company, headquartered in Melbourne. It has seven offices in Australia and two offices in New Zealand. The company currently employs around 300 people and serves over 3000 customers and suppliers. The company, an international freight forwarder, offers ocean, air, customs brokerage and consultancy services. The company’s revenues totaled AUD 334.2 million (approximately $251 million for the fiscal year ended Jun 30, 2016).
Benefits of Acquisition
C.H. Robinson expects APC Logistics’ commendable customer and carrier relationships to blend well with C.H. Robinson’s service offerings and network. The combined entity is expected to add value to customer service while increasing scale of business for the companies. Moreover, we expect this acquisition to boost C.H. Robinson’s global presence. After the transaction closes, C.H. Robinson is expected to integrate APC Logistics into its Global Forwarding division. The company will also integrate APC to Navisphere, its single global technology platform. Notably, C.H. Robinson’s network covers four continents and several countries stretching from the U.S. to China.
Zacks Rank and Stocks to Consider
C.H. Robinson currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the same space include Dynagas LNG Partners LP (NYSE:DLNG) , Green Plain Partners LP (NASDAQ:GPP) and Student Transportation Inc. (TO:STB) . All carry a Zacks Rank #2 (Buy).
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