XPO to Acquire Norbert Dentressangle – Thoughts From 36,000ft on What This Means for the Logistics Industry, for XPO and Those People Who Struggle to Pronounce French Names
Chris Saynor, eft CEO shares his thoughts on the recent acquisition
At around 10pm last night I (and hundreds of other logistics commentators I presume) were sent an email from Brad Jacobs, CEO of XPO with their latest press release which announced the purchase of one of Europe’s largest, oldest and most established Logistics Providers, Norbert Dentressangle. Before I continue, both Brad and Hervé Montjotinthe CEO of Norbert Dentressangle will be speaking at the 13th 3PL Summit and CSCO Forum in Chicago on June 16-18 (www.3plsummit.com) – come and join all of us there.
This news release took me by great surprise….so much so that I feel inclined to share some of my thoughts in writing, even though I’m now currently at 36,000 ft sipping gin and tonics (after a couple of breakfast martinis…which are a great invention, courtesy of Gordon Ramsay’s restaurant at Heathrow) and listening to the Doors’ LA Women thanks to British Airways eclectic music choice on my way to Abu Dhabi for a short vacation. Luckily the flight is only half full so I’m not elbowing anyone whilst typing here in economy class (eft has done well for 17 years but I still can’t bring myself to travel above cattle class).
Why was this news a surprise? Maybe, it was just a surprise to me. It was quite obvious that XPO had not finished their acquisition strategy….they’ve got to keep my old friend, Tom Connolly busy somehow (his job title is all about M&A - he is their Senior Vice President, Acquisitions). They have been very public about their strategy for growth. Recently I remember hearing that Brad had talked about a future with just 3 or 4 major global logistics players, and he obviously saw XPO as being one of them (I have no wifi to corroborate my memory so just trust me on this one…I hope it’s not the gin talking).
The surprise came from the fact that it was Norbert Dentressangle who were being acquired. I really did not expect that. I saw Norbert as the one European company (beyond DHL) which could be the most aggressive in terms of global acquisitions and widening its own scope. Its recent acquisition of Jacobson in the USA which followed numerous European acquisitions pointed towards this move to a global company in its own right, and indeed one could have foreseen more American acquisitions from Norbert. I also did not expect an acquisition of this size now. Brad has talked about the cash XPO had for more acquisitions but this is big. Saying that, I think he has got a good deal. I believe Norbert overpaid a little for Jacobson last year, and now XPO have managed to not only get one of Europe’s largest logistics players with some sizable transportation and warehousing assets, but also another slice of the American logistics pie with the included Jacobson business.
As always integration will be key here. I can only imagine that Norbert had hardly started this process with Jacobson, now XPO will add their myriad previous acquisitions to this process. Obviously as of yesterday, XPO had no real network in Europe, so there should be few issues within the region and mostly beneficial synergies especially with multi-regional clients.
So, what next? Something in Asia for XPO? I think this may not be just yet in any sizeable way. Both Japan Post and KWE have recently made some significant acquisitions with Toll and APL Logistics; and I would imagine swallowing Norbert will take a lot of focus and obviously cash and credit, but I wouldn’t rule out some action in China. I don’t necessarily agree with Brad that there will only be 3 or 4 major global players….I would add a couple more to that number at least, but XPO is on its way to being one of them, if not already. DHL certainly already are, as are UPS, who I think should be looking for more bolt-ons in Europe and Asia, especially in the forwarding, last mile and contract logistics space. FedEx is more of a mystery to me, they are going hard for the express market/last mile with their TNT Express plans, but they don’t seem to want to play so much in the other major spaces. I would think that Schenker, Kuehne + Nagel, Expeditors, CH Robinson amongst others are going to be seriously looking at their plans.
Talking of plans, whether you like XPO or not, and what they are creating, you have to admire the fact that they have a plan, they are reasonably open about their plan and their goals, and they are actioning their plan. I still think too many logistics companies are playing things as they come, and what is really needed in this increasingly commoditized space are clear plans, and strategies that maybe go against the perceived thoughts and that surprise us sometimes.
I cannot conclude these ramblings of this economy class, gin drinking, Doors listening (although I have now in the time taken to write this, moved across the pond musically to the Arctic Monkeys) commentator, without highlighting what many Anglophiles, or at least English speakers could see as the biggest gain from XPO acquiring Norbert Dentressangle…..that is the very fact that XPO is a little easier to pronounce and type than Norbert Dentressangle . From my personal dealings with Brad, I would say Norbert is in good hands, we have met on numerous occasions and he is very approachable, which is a trait that every CEO needs to have nowadays. Amongst the maelstrom that this news must have created around him, he also still found the time to drop me a personal reply to an email I sent him late last night after I saw the story. I’m certainly interested to see how XPO Logistics are moving forward and how they will end-up fitting in to the industry as a whole. I am now prepared to be surprised J
For your information in addition to Brad Jacobs and Hervé Montjotin attending the 3PL Summit in Chicago on June 16-18 so will be the aforementioned Kuehne + Nagel in the shape of their CEO of North America; the CCO of CH Robinson and the President of Global Operations of Expeditors…plus hundreds of their supply chain customers….and me. I look forward to hearing the plans of the industry there and hopefully you will too. The logistics industry is definitely not boring in 2015.