The US-headquartered logistics firm has become part of the Danish DSV Group. The deal was inked today (9 Oct). Both sides announce that the combined company will be one of the world’s
strongest transport and logistics networks.
Copenhagen-based DSV takes over California-headquartered UTi Worldwide at the price of US$7.10 in cash per ordinary share. The total transaction implies an enterprise value of approximately $1.35
billion. The financial transaction was unanimously approved by the Boards of Directors of DSV and UTi.
The per-share consideration represents a premium to the ordinary shareholders of approximately 50% compared to the closing price of UTi on 8 October 2015, and a premium of approximately 34%
compared to the 30-day volume-weighted average closing price.
Holders of ordinary shares of UTi will receive cash consideration of US$7.10 per ordinary share upon closing of the acquisition by way of merger. Following the merger, UTi will become an indirect
wholly-owned subsidiary of DSV.
Steep increase of DSV revenues expected
According to DSV, acquisitions are an integral part of the company’s growth strategy, and DSV has a strong track record of successful integration of acquired companies. The acquisition of UTi is
expected to increase DSV's annual revenue by approximately 50%, creating one of the world's strongest players in the field of transport and logistics.
The Air & Sea Division will be significantly strengthened, and DSV will increase its industry specific capabilities across all divisions. Furthermore, DSV will now be truly global within
contract logistics and expand into road freight activities outside Europe. This will enable the company to offer its customers a broader range of services.
The combined companies will have a more balanced geographical footprint with approximately 61% of revenue in Europe, Middle East and North Africa, 17% in Americas, 16% in Asia (APAC) and 6% in
Sub-Saharan Africa.
Capitalizing on biz synergies
DSV and UTi are a strong match with many potential synergies as a result of similarities in business models and services such as strengthened buying power, consolidation of the IT infrastructure,
offices and logistics facilities.
Kurt K. Larsen, Chairman of the Board of DSV, comments: "We complement each other perfectly, both in terms of business activities and geography. Together, we will be even stronger and able to
capitalize on business synergies as well as a greater global reach to the benefit of shareholders, customers and employees.”
Roger Mac Farlane, Chairman of the Board of UTi adds to this: “Both of us are operating in an industry where increasingly scale is critical. Joining forces with DSV delivers substantially greater
client value and many future opportunities for our people while it is financially very attractive for our shareholders.”
Danske Bank, ING and Nordea have committed to financing the transaction.
Closing is expected in Q1 2016.
Heiner Siegmund
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