Ambitious freight specialist currently looking at purchasing asset-light air and ocean freight forwarders located in Britain, while also eyeing additional opportunities in the US and growing further in Asia-Pacific.
Fast-growing European freight and logistics specialist Scan Global Logistics (SGL) has its sights on entering the UK market through merger and acquisition (M&A) in the coming months while also eyeing further expansion in the US.
The Denmark-headquartered forwarder, owned since 2016 by US-based private equity specialist AEA Investors, has already purchased several companies this year as part of an ambitious global growth strategy. And in a reorganisation move last month it integrated sister company TransGroup – which operates more than 40 offices in the US and Canada – under the SGL name.
“The UK is a very important market and we are currently looking at purchasing asset-light air and ocean freight forwarders located there, while also eyeing additional opportunities in the US and growing further in Asia-Pacific too,” group CEO and co-founder Allan Melgaard told Lloyd’s Loading List in an interview.
Cultural fit
In January, SGL took control of the air and ocean business of US truck brokerage group Werner Enterprises and followed this with two other purchases stateside – Atlanta-based Trans ATL and Boston-headquartered Precision Worldwide Logistic.
In April, it acquired Grupo Contenosa, a Spanish family-owned freight forwarding company with seven offices in Spain and Mexico with annual revenue exceeding €50 million – and which Melgaard described as “a fantastic fit”. April also saw SGL take an 80% stake in the Chicago-based Expedited Solutions.
It has also acquired an unidentified company in Sweden, and at the start of 2020, SGL purchased Australian freight forwarding business Pioneer International Logistics, strengthening its presence in Asia.
Meanwhile, SGL has also achieved organic growth in Germany, Poland, the Czech Republic and France, Melgaard said.
“The overriding dynamic behind these acquisitions is the cultural fit, like-mindedness and shared DNA between ourselves and the companies we are purchasing,” Melgaard explained. “This is not simply M&A for the sake of reaching size and scale as soon as possible. It’s all about the fit and bringing out the potential of the firms we have acquired within our organisation.”
Top- and bottom-line growth
In the first quarter of its current financial year, SGL turned in its best financial result to date for a three-month period, with revenue up 44% compared to Q1 2020 – driven by higher activity levels and rates, mainly from ocean and air freight in the Nordics, Asia Pacific and North America. An adjusted EBITDA totaling US$9.2 million “was achieved despite the impact on the global market of the continuing consequences of the Covid-19 pandemic”, the firm stressed.
SGL’s current network of 120+ offices spans six continents, and the company is on course to increase its 2020 turnover of US$1.6 billion to $1.8 billion this year through organic growth and acquisitions – “revenue being nicely spread between the US, Europe and Asia”, Melgaard revealed. For 2021, further bottom-line growth is expected too.
“We are predominantly an asset-light forwarder with roughly a 50:50 split between and ocean and air freight,” Melgaard added. “We have offices in the US, continental Europe, Asia, Africa and Latin America making us a global or at least semi-global organisation.”
“We accompany our customers in connection with their long-term projects, while also providing emergency forwarding and logistics services – one example being automotive, where we offer high-end solutions to various OEMs. But we operate across a broad range of verticals including fashion, food ingredients, industrial projects and parts and components.”
IPO
Given that SGL is owned by a private equity investment firm, Melgaard accepts that the sale of the company is inevitable at some point.
“That’s what private equity does – it’s the name of the game,” he reflects. “I’m on my third private equity. AEA is a fantastic owner, and while I can’t speak for them, I think they are pleased with the company (SGL) and the way it is developing.”
He continued: “My focus is on building up and running the company. Whenever the time is right, doubtless a new owner will emerge – and more than likely in the shape another private equity firm.
“Of course, you can never rule out being acquired by one of your peers; but speaking for SGL’s management – and we are all investors in the company – we have a clear ambition to continue the journey of M&A and organic growth and to ultimately IPO the company and take it to the next level. The ambition is to build one of the best companies within the logistics industry – customer-centric, agile, flexible and purpose-driven.”
Source: lloyd´s
