Global automotive logistics sector sees further consolidation. Exel buys FX Coughlin Group
FX Coughlin Group, a leading USA-based supplier of logistics services to the automotive industry, is being bought by Exel of the United Kingdom.
The move is being seen by industry observers as further evidence of the continuing trend in automotive sector logistics for consolidation among service providers as manufacturers increasingly seek to work with operators that can offer advanced supply chain solutions on a global basis.
That view is confirmed by a spokesperson for Exel, which claims to have a strong automotive logistics business in both Europe and the Americas focused on core skills in inbound logistics and after-market spares management.
“Increasingly, higher value products are being shipped longer distances, just-in-time, to ensure lower supply chain inventories while maintaining delivery performance,” he says. “Coughlin has developed impressive capabilities that provide door-to-door, time-definite services to its customers. With automotive supply chains becoming more integrated and more global, the addition of Coughlin significantly increases Exel’s ability to offer an international integrated solution to the automotive industry.”
John Allan, Exel chief executive, adds: “Coughlin’s range of services and strong customer relationships will enhance Exel’s position with major automotive manufacturers and will support the group’s objective of strong medium term growth.”
Headquartered in Detroit, Michigan, Coughlin also has overseas operations in the UK, Germany, the Netherlands, Mexico, Canada and Australia. The company, which was formed in 1956, provides integrated supply chain solutions including freight management, customised packaging and specialist contract logistics services. Customers include Ford, Jaguar, Visteon, DaimlerChrysler and General Motors
Exel says its planned acquisition of Coughlin, which is still subject to regulatory clearance, will take the form of an initial cash payment of $140 million, assumed debt of $21 million and a further $40 million of deferred payments linked to customer retention over a three-year period. Potential further payments of up to $130 million will be made if the performance of the business significantly exceeds current profitability, it adds.
