Norbert Dentressangle buys into the US on the back of continued profit growth

Norbert Dentressangle has advanced further in its ambition to build a global logistics presence through the acquisition of Jacobson Companies, US warehousing and contract logistics provider.

Norbert is paying US$750m for all of the stock in Jacobson from the private equity firm Oak Hill Capital Partners however there is also an ‘earn-out’ in-place which is probably a means of reassuring Norbert Dentressangle that there are no hidden problems at Jacobson. The US company is estimated to have a revenue this year of $800m and an EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) of $80m which would imply a most impressive margin.

The acquisition is a little surprising as Norbert had previously emphasised that it was looking to buy freight forwarding businesses. Jacobson is essentially focused on the US domestic market with a network of warehouses across the country, 84% are dedicated and the rest shared user. Almost half of the business is focused on the mid-West with a quarter of revenue generated by transport management, usually linked to dedicated warehousing contracts. One of the reasons given by Norbert Dentressangle for buying Jacobson is the desire to gain exposure to a faster growing economy than many of its core European markets.

The ability of Norbert to grow is supported by its continuing profitability. Its first half results, released today (31/7/2014) show revenue growing by 13.4% and profits before goodwill right-offs was up 19%. The performance was driven by the contract logistics business which saw a 22% increase in underlying operational profit on revenue that saw an underlying increase of 8.4%, augmented by acquisitions which drove revenue growth up to 19.2%. The road freight division was not quite as dynamic however, although revenue including acquisitions was up 5.6% and operational profit jumped by 17%.

The freight forwarding business also grew by acquisition and broke into positive territory in terms of operating profit, if only to €0.8m.

It appears that Norbert Dentressangle is both benefitting from the improvement in the British economy and its ability to grow into new areas of business. In particular it continues to be able to buy businesses and turn them around. Clearly the company thinks that it can extend this performance to North America.

For more information on the markets in which Norbert Dentressangle operates, and its acquisition strategy, take a look at Ti’s latest Global Contract Logistics 2014 and Global Freight Forwarding 2014 reports.