C. H. Robinson to Acquire Phoenix International
Third-party logistics company C.H. Robinson has announced an agreement to acquire Phoenix International Inc, in a deal for $571.5 million in cash and around $63.5 million in C.H. Robinson stock.
The announcement comes after C.H. Robinson experienced shrinking net profits in the three months to June 30th, at a time when high costs in the trucking industry meant costs rose faster than pricing.
Phoenix is a privately-held international freight forwarder, offering ocean, air and customs brokerage. Currently serving approximately 15,000 customers globally, Phoenix is located across 15 countries, generating, gross revenues of approximately $807 million in its most recent fiscal year.
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"Phoenix is a high quality growth company that brings additional expertise and scale to a key part of our long term growth strategy," said John Wiehoff, C.H. Robinson chairman and chief executive officer. "Along with their proven track record of success, Phoenix has strong customer and carrier relationships, a talented management team and excellent people, and a performance-based company culture that is very similar to Robinson's."
C.H. Robinson shares were up two percent at $59.85 on Tuesday afternoon on the Nasdaq following the announcement. Closing of the acquisition is expected to occur in the fourth quarter of 2012. C.H. Robinson will use existing cash and plans to enter into a revolving credit facility with major banks to finance the cash portion of the purchase price. The acquisition is expected to be modestly accretive in the first year.
Picture credited to Gary Hannes