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Cross-border transportation and logistics deals drive increase in M&A records: PwC

NEW YORK, N.Y.–Merger and acquisition (M&A) activity in the transportation and logistics industry continued to improve in the first half of 2015, exceeding the 10 percent growth rate recorded in the first half of 2014, according to Intersections, a quarterly analysis of global deal activity in the transportation and logistics industry by PwC US. Robust deal activity in the first half of this year drove gains of 15 percent in volume and 55 percent in value, compared to the same period last year, said the analysis.

In the second quarter of 2015, there were 61 announced transactions (worth $50 million or more) for a total value of $34.4 billion, compared to 59 deals worth $29.6 billion in the previous quarter and 56 deals totaling $23 billion in the same period last year.  The first half of 2015 recorded 116 deals with a total value of $64 billion, easily exceeding the 101 transactions worth $40.8 billion in the first half of 2014.

“The first half of the year proved to be strong year for M&A activity in the transportation and logistics industry and deal value in the second quarter was the highest it has been in seven years,” said Jonathan Kletzel, U.S. transportation and logistics leader for PwC.

“Cross-border and service line expansion were key themes that drove the rationale for deals in the second quarter, particularly in advanced economies. We expect cross-border activity to continue through the end of the year as businesses look to gain access in new markets and the strong dollar gives investors opportunities for outbound deals.”

According to PwC, the increase in cross-border deals was primarily driven by corporate dealmakers seeking to gain a foothold in strategic markets to improve geographic reach and long-term growth. Strategic investors accounted for 56 percent of all deal activity in the quarter and 71 percent of cross-border transactions.

Megadeal activity (transactions worth more than $1 billion) was responsible for the substantial increase in deal value in the second quarter – with nine transactions totaling $23.6 billion or 69 percent of all deal value.

Trucking and logistics industries led second quarter deal activity, combining for more than half of the quarter’s deal volume (trucking – 28 percent, logistics – 23 percent). As predicted in PwC’s previous analysis, trucking deals remained of interest as larger companies continue to acquire smaller ones in order to increase market share while gaining capacity and talent. Of the nine megadeals in the quarter, the largest was a logistics transaction worth $4.8 billion and the trucking mode was also represented with three megadeals totaling $7.6 billion, said PwC.

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