Odyssey Logistics & Technology Corp. has agreed to buy U.S.-based freight forwarder AFF Global Logistics for $465 million in cash and equity, the company announced Oct. 18.
The deal is one of three mergers involving freight forwarders to be announced in one day.
Illinois-based AIT Worldwide Logistics acquired WorldFresh Express, a freight forwarder in Los Angeles, and FedEx Corp. agreed to buy Manton Air-Sea Pty Ltd., an Australian company based in Sydney.
Today, Odyssey announced its intent to acquire AFF Global Logistics. Read the full release here: https://t.co/llsfp9DYN5— Odyssey Logistics (@OdysseyLogistic) October 18, 2018
Freight forwarders have become takeover targets, in part, because of a boon in global trade, according to one industry researcher.
“After years of slow growth, international transportation managers and freight brokers have seen significant volume increases this year due to shippers building inventory prior to the implementation of proposed import tariffs,” said Evan Armstrong, president of Armstrong & Associates in West Allis, Wis. “These increases, in conjunction with increasing airfreight volumes from growth in e-commerce, are making freight forwarders more interesting acquisition targets.”
Odyssey and AFF are owned, in large part, by The Jordan Co., an investment firm with offices in New York and Chicago that has been on a logistics buying spree in recent years. TJC acquired a majority stake in Odyssey a year ago and has held a controlling stake in AFF, along with other investors, since December 2012.
Other transportation-related holdings for TJC include GlobalTranz Enterprises, Capstone Logistics and Quick International Courier.
TJC acquired GlobalTranz, a Phoenix-based freight brokerage and logistics firm, in August in a deal valued at $400 million and GlobalTranz subsequently has acquired AFN Logistics, a Chicago-based freight brokerage firm.
Capstone also has added its holdings recently, acquiring the freight brokerage firm LoadDelivered and software provider Logistical Labs this year. Capstone also acquired Pinnacle Workforce Solutions in 2015.
If completed later this year, Odyssey’s purchase of AFF would be the largest ever for the Danbury, Conn.-based company, adding 35 locations and 600 employees to Odyssey’s network of 37 locations and 1,800 employees. Both firms provide air and ocean freight forwarding services, but AFF is more focused on goods moving to and from the continental United States and Hawaii, Alaska and Puerto Rico. Odyssey operates globally and provides a broad menu of transportation services, including intermodal, trucking, bulk container shipping and transportation management.
Odyssey CEO Bob Shellman. (Odyssey Logistics)
In an interview with Transport Topics, Odyssey CEO Bob Shellman emphasized that there is very little overlap in services or geographic coverage between Odyssey and AFF.
“AFF’s load consolidation expertise, U.S. offshore markets coverage, warehouse network and Asia Pacific import business will markedly enhance Odyssey’s strong truck, rail, marine and facility networks,” Shellman explained. “This transaction reflects Odyssey’s commitment to continuous growth and expansion of services.”
FedEx said its deal with Manton also serves to expand the freight forwarding and customs brokerage services offered by FedEx Trade Networks in the land Down Under.
“Adding Manton’s capabilities will open up opportunities for us to continue to expand in Australia, a country with a strong GDP and a significant market in the Asia Pacific region,” FedEx Trade Networks CEO Richard Smith said. “We look forward to potential business opportunities through the collaboration between Manton and FedEx Trade Networks with the FedEx Express and TNT presence in Asia Pacific and Australia.”