Carve Out of a Global Freight Forwarder: Navigating Cross-Border M&A During a Pandemic
Werner Enterprises, Inc. (NASDAQ: WERN) made the strategic decision to divest its global freight forwarding business Werner Global Logistics (WGL) to focus on providing superior truckload and logistics services in North America. WGL provides freight forwarding services for international ocean and air shipments, with offices in Omaha, NE, Shanghai, and multiple locations in Mexico.
Werner hired BGSA LLC (BGSA) to evaluate and advise the company on its options.
We immediately recognized WGL’s high service standards, rooted in Werner’s commitment to quality, blue-chip customer base, exceptional leadership in its US based an international management team, and track record for delivering strong financial results.
We conducted a broad auction process targeting logistics providers that were interested in expanding their international capabilities with trade lanes from China into the US and Mexico with a platform with an impeccable service reputation, an outstanding customer base and an execution-oriented management team.
We started our process at the beginning of 2020, and thanks to our successful positioning of WGL, we secured several offers based on E2020 EBITDA at the end of February 2020. Two weeks later the US and the world went on lockdown due to the COVID-19 virus.
BGSA reopened the process in early September, as Werner and prospective buyers felt they had better and more positive visibility into the world economy and sector. BGSA assisted Werner in producing and distributing WGL’s monthly financial performance during the dark months of the pandemic through a KPI dash to prospective buyers, revealing sustained revenue and EBITDA performance that beat pre-COVID expectations.
As Scan Global Logistics Group (SGL, a.k.a. Transgroup) successfully signed an LOI with an exclusivity clause, BGSA assisted the complex process to negotiate the cross-border asset purchase agreement, and maintained weekly and sometimes daily tabs on work streams to get to a successful closing, from ensuring a smooth transfer of the Chinese employees to SGL’s China offices to getting a tax identification number and bank accounts in Mexico while dealing with COVID restrictions.
- WGL was sold to Scan Global Logistics Group – one of the world’s largest privately-held supply-chain logistics companies based in Denmark.
- The combination of WGL’s freight forwarding services in China augments SGL’s offering, and WGL’s Mexico operations established a new market for SGL.
- The transaction was accretive to Werner’s earnings, and the two companies have become business partners beyond the sale of WGL.
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