Consultant expects increase in M&As in the 3PL sector

AN increasing number of mergers and acquisitions in the third party logistics (3PL) sector is expected following recent announcements that Caterpillar Inc and Horizon Line are seeking buyers for their logistics businesses.


Or so says Richard Armstrong, chairman and CEO of Armstrong & Associates in Stoughton, Wisconsin, a consulting firm, which has noted an uptick in M&A activity, reports American Shipper.


"The people who could invest or buy had a lot more capital available," he was quoted as saying. "There is more interest in buying and selling; there is more interest in IPOs, and I expect that is going to continue." Mr Armstrong also expects "some pretty significant deals."


Caterpillar revealed earlier in March that it was exploring either the sale of Caterpillar Logistics 3PL business or restructuring it as an independent business.


Horizon Lines is reported to be looking to sell its Horizon Logistics business, which accounted for only a small part of its US$1.2 billion in revenue last year. In 2009 the carrier's logistics unit posted revenues of $37.7 million, which was the last year it reported the results of this segment separately.


The shipping line is facing bankruptcy after paying a US$45 million fine to the US government for price-fixing the US-Puerto Rico trade, the report added.
(Source:http://www.schednet.com)