The logistics industry is likely to see more mergers and acquisitions this year, according to KPMG.
Steffen Wagner, European head of transport transactions at KPMG said: “After a drop in transaction values in the second half of 2011, this year certainly took off to a promising start. Many companies, particularly in the logistics segment, are sitting on full coffers and are ready for increased strategic acquisitions.”
The first quarter of 2012 saw a big increase in the value of deals announced, with a global value of £12.3 billion. The combined value of completed and announced deals for the quarter stands at £17.4 billion, bigger than in any of the previous four quarters.
“Whether or not the market will rally will depend mainly on three factors: GDP development and the general economic outlook, the M&A appetite of strategic investors and the investment pressure among financial investors.”
Europe looks set to be to be at the centre of M&A activity in the sector. According to KPMG, the Post & Express sector will continue to be targeted by strategic and financial investors, especially in Europe as the overall market size will likely grow in the future due to rising E-Commerce and cross-border express deliveries.
KPMG predicts more opportunities for investors in shipping, logistics and the infrastructure market.
Wagner said: “The logistics market is highly fragmented as well, especially in Europe. Private equity investors looking to invest in niche markets and the further need for consolidation will be the main drivers of M&A activity in this sector. Opportunities will be in temperature-sensitive transport and food logistics, pharmaceutical & chemical logistics and the transport of hazardous products.”