Merger and acquisition (M&A) activity in the transportation and logistics industry was higher in the fourth quarter of 2012 than in any quarter in the past three years, according to the PricewaterhouseCoopers (PwC) quarterly Intersections report
The accounting and consulting firm said there were a significant greater number of deals in 2012 than in the prior year.
"In the three-month period ending December 31, 2012, there were 68 transportation and logistics transactions worth $50 million or more totaling $26.5 billion, a significant increase compared to 39 deals representing $15.5 billion in the third quarter and 36 deals totaling $14.8 billion in the fourth quarter of 2011. This strong close to the year led 2012 annual volume and value to 193 deals totaling $80.5 billion, exceeding 2011 deal value by 35 percent," the firm said.
“The flurry of activity in the fourth quarter contributed to a strong overall result for 2012, driven by deal recovery within the Eurozone,” said Jonathan Kletzel, U.S. transportation and logistics leader for PwC, in a statement. “Our overall outlook for global transportation and logistics M&A is positive due in part to economic performance in emerging and developing markets. Based on our analysis, we are forecasting 22 percent growth in announced volume and 15 percent growth in announced value in 2013, compared with 2012 as strategic and financial investors continue to consider M&A as part of their growth strategies.”
Freight operators were more frequent targets in 2012, making up 31 percent of transactions, PwC said. While infrastructure deals accounted for a lower proportion of the deal market in 2012 compared with the past seven years, the majority of mega-deals announced throughout the year were infrastructure targets. Infrastructure deals are likely to become more important to overall sector M&A due to budget pressures in developed countries and the need to secure more investment to support growth in emerging and developing countries, according to PwC.
“We believe the balance of risks favors an optimistic outlook for transportation and logistics M&A in 2013 and we are looking at several themes including the potential for more large infrastructure deals, Russia’s broad five-year privatization plan contributing to the mega deal table and significant headline risk in the form of U.S. and European country-specific concerns,” Kletzel said. - Chris Dupin