CEVA Logistics is to acquired the freight management business of CMA CGM, its biggest shareholder, as part of a plan to increase revenue to more than $9 billion by 2021.
It has also appointed Nicolas Sartini, currently acting chief executive of CMA CGM’s APL business, as chief operating officer and deputy chief executive from January.
CEVA chief executive Xavier Urbain said: “With the support of our strategic partner CMA CGM, I am proud to open a new chapter for CEVA Logistics and announce that we can accelerate our transformation and turnaround action plan in the next three years and beyond. This can be achieved by a combination of our commercial and sales focus, cross selling with CMA CGM customers, our own productivity actions, the integration of CMA CGM Log within CEVA and sharing resources with CMA CGM in the field of procurement and administrative functions.
“I am very happy to welcome Nicolas who has successfully turned around the APL shipping company as my Deputy and COO.”
Management expects that its initiatives will result in an incremental $100 million of adjusted EBITDA by 2021 compared to the objective set at the IPO. As a result, management expects an adjusted EBITDA range of US$ 470 to 490 million by 2021.
It plans to cross-sell with CMA CGM, strengthen key account relations and increase “share of wallet”, while diversifying to medium and small size customers, focus on the value-add segments like cold chain logistics and LCL, develop fast-growing sectors, such as e-commerce and retail, organically and penetrate new geographic areas with strong growth potential (Asia, Middle East, Africa)
CEVA has agreed in principle to acquire 100 per cent of CMA CGM’s freight management activities for $105 million in cash.
CMA CGM Log expects to generate revenues of $630 million and an EBITDA of US$ 16 million. The company has 1,200 employees in 32 countries via directly-owned entities and has cooperation agreements in 26 additional countries. CMA CGM Log has a significant presence in high growth markets including India, China, Australia and the US.
The integration of CMA CGM Log into CEVA Freight Management Business line is expected to reinforce CEVA’s footprint in Ocean Freight Management with 170,000 additional controlled TEUs, addressing CEVA’s target to reach close to 1,000,000 TEUs.
Nicolas Sartini has been acting as chief executive of APL since CMA CGM’s takeover of APL in June 2016. CEVA said that in this role, Sartini has been instrumental to the quick turnaround of APL between 2016 and 2018 and would bring to CEVA a wealth of expertise in the field.