Maersk officials said that the purchase price is $1.68 billion (USD), adding that the acquisition is subject to regulatory review and approval, which it expects to be obtained by the second quarter, with both Maersk and Pilot operating as independent businesses until the acquisition is made official.
Earlier today, Copenhagen, Denmark-based A.P. Moeller Maersk, an integrated container logistics services provider, announced that it intends to acquire Glen Mills, Penn.-based 3PL, last-mile and full mile services provider Pilot Freight Services, from Pilot’s owners, New York-based private equity firm ATL Partners, and Canadian institutional investor British Columbia Investment Management Capital.
Maersk officials said that the purchase price is $1.68 billion (USD), adding that the acquisition is subject to regulatory review and approval, which it expects to be obtained by the second quarter, with both Maersk and Pilot operating as independent businesses until the acquisition is made official.
And they added that upon completion of the acquisition, Maersk plans to extend its integrated logistics offering deeper into the supply chain of its customers to complement previous acquisitions it has made to provide integrated logistics solutions in North America, including Performance Team (PT) (B2B warehousing and distribution) and Visible SCM (e-commerce warehousing and parcel distribution).
Maersk also said that Pilot will be adding new services within the big and bulky e-commerce segment, and subsequently boost cross-selling opportunities, as well as create significant cost synergies by leveraging capabilities across the different parts of service solutions.
“In Maersk we continue our path to develop truly integrated logistics offering for our customers, offering them better visibility, more control and resilience in their supply chains,” said says Vincent Clerc, CEO of Ocean & Logistics, A.P. Moller – Maersk, in a statement. “Adding the capabilities of Pilot is especially important because it will allow us to create more exciting solutions for our customers and support them through the acceleration of the migration towards e-commerce. Furthermore, it will open significant cost synergy opportunities by leveraging the capabilities we have already developed in the network.”
Established in 1970, Pilot is a full-service transportation and logistics provider with 87 stations and hubs throughout North America with B2C expertise in retail, home furnishing and consumer electronics, noted a Maersk customer advisory. The combined Pilot and Maersk scale will offer customers over 150 facilities in the U.S., including distribution centers, hubs and stations, adding that its offerings combined with Maersk’s international network will “create significant new capabilities.”
The customer advisory also said that Pilot’s acquisition of American Linehaul Corporation in July 2021 was instrumental in securing market expertise in LTL expedited capabilities and middle mile, too.
“Pairing this with Maersk’s already extensive landside offering will allow our customers to optimize the crucial middle mile with greater visibility, efficiency, and cost effectiveness across extensive and high-quality networks for both parcel and bulk,” said Maersk. “This includes Maersk’s support to the fast-paced expansion of cross-border logistics.”
Tom Boyd, Media Relations Manager, Maersk North America, told LM that a major driver for what led Maersk have interest in Pilot was that Maersk had customers asking for the services and capabilities provided by Pilot.
“These customers were experiencing strong sales growth through their e-commerce channels but needed more capacity in the fulfillment, delivery, install and removal process inherent in the home delivery process for things like appliances, electronics etc.,” said Boyd.
As for the competitive advantages associated with the pending acquisition of Pilot, Boyd explained that the main benefit is Maersk has customers who were asking for this type of supply chain capability, and it found a company who will easily integrate and complement its current business model.
“We also gain significant more channel capacity in the B2C sector with Pilot’s expertise and network,” he said. “Lastly, this is a growth segment for our customers who can realize more sales growth (driven by e-commerce channels and online consumer buying) if they can perform well on the home delivery experience.”
Ben Gordon, Managing Partner of Cambridge Capital, an investor in niche supply chain leaders and also Managing Partner of BGSA Holdings, a leading mergers and acquisitions advisory firm focused on the transportation, logistics, and supply chain technology sector, told LM that this deal illustrates the continuation of an underlying trend.
“Shipping giants like Maersk are converting their windfall 2021 profits in shipping into long-term sustainable growth in logistics,” he said. “They’ve acquired Visible SCM in parcel logistics, LF Logistics in global freight forwarding, and now Pilot in big/bulky last-mile logistics. I expect Maersk will continue to buy logistics services businesses. And I expect other shipping lines to follow suit.”
Panjiva Research Director Eric Oak said that it makes sense for Maersk to diversify its service offerings.
“Providing end-to-end services likely allows them to more expedited services while defending business from end-to-end providers like forwarders,” he said.
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