Private Equity Firm Apax Acquires Quality Distribution


May 11, 2015

A North American logistics and transportation provider, Quality Distribution, has announced it is going to be acquired by the private equity firm Apax. The deal is going to be worth around $800 million. The deal is another major merger and acquisition announcement in the logistics and transportation sector.


The Details of the Deal
According to the official statement, the deal will see a transaction of around $800 million, including the assumption of debt. The share price will be $16 per share and paid in cash. This valuation would represent a premium of close to 63% of the company’s closing share price on May 6. According to the representatives of Quality Distribution, the deal will be good deal for the shareholders, as it “delivers immediate compelling value for their shares”.


The Plans
According to Tampa Bay Times, the private equity firm might help the Tampa-based company expand through further acquisitions. The company currently could do with a bit of investment, as its first quarter results showed declining sales and profits.


Gary Enzor the chairman and chief executive officer of Quality Distribution, said in the statement, “Apax supports our strategy and is committed to helping us continue our pursuit of strategic growth in our Chemical and Intermodal businesses while managing the current market conditions in the energy industry.” The company has around 1,100 full-time employees and another 1,000 independent drivers and owner-operators.


Number of Deals in the Sector
The acquisition is the third major merger and acquisition in the sector in less than a month, according to Transport Topics. The other big announcements have been the $4.8 billion deal between FedEx Corporation and TNT NV, the Dutch freight and package operator. Furthermore, XPO Logistics and Norbert Dentressangle closed a deal just a few weeks ago. That deal was worth $3.5 billion.


The industry has plenty of things supporting the investor interest and further consolidation might take place in the coming months. It remains to be seen whether other private equity firms get involved in the sector.


A Varied Portfolio
For the private equity firm, the deal adds another company to its portfolio, which ranges across industries. The most notable companies in its current portfolio include the financial advisory service, as well as the fashion brands Karl Lagerfeld and Tommy Hilfiger. Apax is also involved with the mobile game provider King, which is most known for its Candy Crush game.


Ashish Karandikar, a partner in the private equity firm, said in the official statement that the firm is “impressed with the strategy and vision articulated by the Company’s management team”. “Quality is well positioned to take advantage of both organic growth opportunities and strategic acquisitions while benefiting from the financial and operational flexibility of operating as a private company. We look forward to partnering with Quality’s management team as they pursue the Company’s next phase of growth,” Mr Karandikar said.


According to the reports, institutions like Deutsche Bank AG and SunTrust Bank are financing the deal. The deal still requires shareholder approval.


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