Menlo acquires Shanghai-based 3PL for US$60m
Menlo Worldwide has signed a definitive agreement to purchase Chic Holdings and its wholly owned subsidiaries Shanghai Chic Logistics and Shanghai Chic Supply Chain Management.
Menlo is acquiring Chic Holdings, its assets and subsidiaries for a cash payment of US$60 million plus an undisclosed future earn-out incentive based on its performance.
Headquartered in Shanghai, Chic Logistics provides domestic 3PL and transportation management services in The People’s Republic of China. The company has 130 operating sites in 78 cities, and generated revenues of US$55.2 million in 2006, a 40% increase over 2005.
According to Menlo Worldwide president Robert Bianco Jr, this is the most strategic acquisition in Menlo’s history.
Menlo’s China operations will be based at Chic Logistics’ headquarters in Shanghai. Combined, the two companies will operate from 139 sites in 79 cities, with nearly 180,000 m2 of warehouse space under management.
“With Chic Logistics’ domestic capabilities and network, we immediately become a major player in the intra-China market — the next great growth engine for transportation and logistics,” said Bianco.
This acquisition, combined with Menlo’s existing operations in China and other parts of Asia and the company’s recent acquisition of Singapore-based Cougar Express Logistics gives Menlo one of the industry’s strongest and most extensive networks for managing Asia-Pacific freight and logistics.
The acquisition fulfils several strategic objectives for Menlo, including the possibility of linking Chic Logistics’ domestic network with the US-based infrastructure of Menlo Worldwide and its sister companies (Con-way Freight and Con-way Truckload), which potentially enables a complete end-to-end solution from first-mile logistics in China through last-mile delivery in North America.
The acquisition is subject to customary closing conditions. The boards of both companies have approved the agreement, and settlement of the transaction is expected to occur during the fourth quarter.
