The new owner of Sirva Inc., the nation’s second-largest household goods mover, will try to inject new life into a business that has slumped in recent years due to changing demographics and a slowdown in business relocation activity.
Private-equity firm Madison Deaborn Partners did not disclose how much it paid for Sirva.
Sirva, based in Oakbrook Terrace, Ill., is a holding company for Allied Van Lines and North American Van Lines in the United States and Allied Pickfords in the United Kingdom. The company also operates a self-storage container moving business called Smartbox Solutions and provides relocation management and financial services. Sirva has 55 offices, 620 agent locations and 2,600 employees in 170 countries.
“As a leader in a dynamic and highly fragmented industry, Sirva has a bright future,” asserted Richard Copans, managing director of Chicago-based Madison Dearborn Partners, which agreed to buy Sirva for an undisclosed amount from two other investment firms.
“With a strong brand, global footprint and impressive track record, Sirva is well-positioned to enter a new phase of growth and continued success,” Copans said in a statement issued May 23. “We look forward to bringing to bear our expertise and deep network of resources and contacts to help ... grow the business by continuing to provide the very best corporate relocation services available in the market.”
Local and long-distance moving and storage activity generates about $12.6 billion in annual revenue from more than 7,000 companies in the United States, according to the American Moving & Storage Association.
Over the past decade, based on survey data from AMSA-member companies, interstate household goods shipments have fallen 26%, with the biggest decline coming in the private pay consumer market.
The downward trend continues in 2018 with individual shipments falling 3.4% to 33,601 and total shipments declining 4.7% to 81,403 in the first quarter compared to the same period in 2017.
Fueling the decline are a number of factors, including an increase in the number of people working from home and a decline in the average size of shipments as people move into smaller homes in urban areas.
The industry has also experienced consolidation over the past two years with several large carriers going out of business and others pursuing mergers and acquisitions.
In 2016, interstate mover Graebel Moving and Workplace Solutions, based in Dallas, and The Kane Co., a commercial moving specialist based in Washington, D.C., shut down.
Suddath Cos., based in Jacksonville, Fla., took over some of Graebel’s business and last year acquired Sterling Mobility, a global relocation firm based in the United Kingdom.
Interstate Group Holdings, based in Springfield, Va., also purchased American Red Ball World Wide Movers.
Sirva CEO Tom Oberdorf said he’s looking forward to working with the new ownership group and called Madison Deaborn “the ideal partner to help us accelerate our growth strategy.”
Oberdorf did not provide any details, but said the investment firm “has a long, successful track record of supporting companies like Sirva.”
Madison Deaborn has invested $23 billion in 130 companies since it was founded in 1992. The firm’s current holdings include medical waste disposal service provider Stericycle Inc. and U.S. Lumber, a distributor of building materials in the Southeast, Mid-Atlantic and Northeast regions of the United States.
Sirva had been jointly owned by Aurora Resurgence Management Partners and Equity Group Investments since 2008.
Sirva ranks No. 21 on the Transport Topics Top 100 list of largest for-hire carriers in North America with annual revenue of about $1.5 billion. It ranks second to Unigroup Inc., the parent of United Van Lines and Mayflower Transit, on the list of largest for-hire carriers in the household goods/commercial delivery sector.
The deal is subject to regulatory approval and is expected to be completed this summer, company officials said.