Geodis acquires the freight forwarding division of TNT

(TNT Freight Management formerly known as Wilson Logistics)


GEODIS is accelerating its international development, thereby boosting its business and increasing its results.

TNT Freight Management (TFM) est un acteur mondial de la commission de transport. Son chiffre d’affaires 2005 s’élève à 782 millions d’euros, réparti de façon équilibrée entre la commission de transport aérien (49,8%) et maritime (37,2%). Dans ces secteurs, il se situe respectivement parmi les 20 premiers et les 10 premiers acteurs mondiaux. Son réseau détenu à 95% en propre, couvre les zones Amériques (15,6%), Asie/Pacifique (20,2%), Pays nordiques (44,7%) et Europe/Moyen-Orient (19,5%).

With the acquisition of TFM, GEODIS will double its revenue from freight forwarding to about €1.6 billion—more than one third of the total revenue of the GEODIS group. GEODIS will thus position itself among the top 5 freight forwarders in Europe and among the top 10 globally, adding to its existing network significant and complementary positions in Scandinavia, the Americas, (Canada, USA, Argentina, Brazil, and Chile), Australia and New Zealand, and Germany.

The combined new entity will have revenue of €4.4 billion, based on 2005 figures, and 26,000 employees around the world. GEODIS is thus considerably expanding its global network and enhancing its range of service offerings.

This transaction combines complementary geographic positions and client portfolios and brings new opportunities to the Group to develop revenue in an activity with strong, sustained growth. TFM’s level of strong profitability and anticipated released synergies will provide a significant boost to the GEODIS group’s financial results. The transaction will also balance the portfolio of the Group’s activities (Groupage/Express (LTL): 35.5%; freight forwarding: 35.6%; logistics and associated transport: 28.9%).

TFM has demonstrated consistently solid profitability, which has been improving since 2003, and generates a high level of cash flow. The offered price, at an enterprise value of €460 million, is in line with valuations of other freight forwarding businesses. Integration costs are estimated at €25-30 million, and will be primarily incurred in 2007. Expected synergies represent approximately €35 million per year, of which a significant portion is expected to impact the results of 2008.

With BNP Paribas Corporate Finance and PH. VILLIN CONSEIL acting as the Group’s advisors, the acquisition will be financed through a syndicated loan arranged and underwritten by BNP Paribas, a portion of which will bridge a rights issue of approximately €150 million. The rights issue is expected to be launched in the second quarter of 2007, subject to market conditions. Preferential subscription rights will be offered to every GEODIS shareholder. SNCF Participations has already indicated its intention to subscribe to the rights issue pro rata to its shareholding in GEODIS, i.e., 43.3%. In view of the increase in capital, TFM’s future results and potential synergies should be accretive to earnings beginning 2008.

This transaction will be subject to the approval of European competition authorities.

Pierre Blayau, Chairman & CEO of the GEODIS group stated: “This transaction, made possible by our capital structure, which we have made healthy after six years of work, is in line with our international development strategy of expanding in activities of strong growth. Freight forwarding is an increasingly important activity in transport and logistics. Our new critical mass makes us more competitive and better positioned to serve our clients.”

An investor/press conference will be held today,
Thursday, November 16 in Paris at the Hotel George V at 11.00 am
(31, avenue George V - 75008 Paris)