Neptune Orient Lines to Sell APL Logistics for $1.2 Billion
Singapore-based Neptune Orient Lines has agreed to sell its APL Logistics business unit to Japanese shipping firm Kintetsu World Express for $1.2 billion.
“This is a strategic move that will allow us to focus on improving our liner shipping business, while at the same time enabling APL Logistics to grow,” NOL President Ng Yat Chung said in a statement issued Feb. 17.
NOL officials said the divestiture of APL Logistics followed a “robust and highly competitive process.” Among the bidders was CJ Korea Express Corp., the largest logistics firm in South Korea, according to documents NOL filed with regulatory authorities last year.
At the time, NOL officials had expected the sale of APL Logistics to fetch as much as $1 billion, according to industry analysts.
KWE President Satoshi Ishizaki said the purchase of APL is part of a plan to bolster the company’s business outside of Japan.
“Since 2013, we have laid out a strategy to strengthen our international presence, especially in the United States and Asia,” Ishizaki said. “This transaction fits right into our strategy.”
Ishizaki said KWE plans to operate APL as a separate business unit with its headquarters remaining in Singapore.
APL Logistics operates in more than 110 countries and ranks No. 14 on Transport Topics’ list of the Top 50 Logistics Companies in North America. The company’s U.S. operations, based in Scottsdale, Arizona, provide air and ocean freight forwarding, warehousing and distribution, customs brokerage, dedicated contract carriage and supply chain consulting services.
APL Logistics generated earnings before interest and taxes of $67 million on revenue of $1.7 billion in 2014. By contrast, NOL’s liner business posted a loss of $143 million on revenue of $7 billion. About two-thirds of APL’s revenue comes from the United Statees, with 27% coming from Asia and the Middle East and 11% from Europe.
APL President Beat Simon said the company expanded its rail-based vehicle distribution business in India during the past year and in September acquired Commonwealth Express Ltd., a firm based in Lexington, Kentucky, that provides asset-based transportation and freight brokerage services.
KWE began operating in the United States in 1968. It ranks No. 13 on the Transport Topics’ list of the Top 25 Freight Forwarders with gross revenue of $2.7 billion and annual shipping volume of 493,000 20-foot-equivalent ocean containers and 924,000 metric tons of air freight, according to data from logistics research firm Armstrong & Associates.
Officials from both companies said the transaction is subject to approval by NOL shareholders and regulatory agencies.