View
220
Download
0
Category
Preview:
Citation preview
7/31/2019 1Q11 TL MA Report
1/20
IntersectionsFirst-quarter 2011transportation and logisticsindustry mergers andacquisitions analysis
Special report:
Gaining a competitive
advantage by retaining top
talent through a merger
www.pwc.com/us/industrialproducts
7/31/2019 1Q11 TL MA Report
2/20
Welcome to the rst-quarter 2011 edition ofIntersections, PwCs quarterly analysis of mergers
and acquisitions (M&A) in the global transportationand logistics (T&L) industry. In addition to adetailed summary of M&A activity in the quarter,this edition features a special report on retainingtop talent and maintaining organizational culturethrough a merger. With M&A activity increasingacross the globe, executives are facing talentmanagement challenges, including organizational
design, integration planning, and the cultural blendbetween acquirer and target. A disciplined approachto people integration helps companies achievedesired synergies, build momentum, and instillcondence among their stakeholders.
7/31/2019 1Q11 TL MA Report
3/20
1 PwC
Special reportGaining a competitive advantage by retaining top talentthrough a merger
Companies engaged in merger and acquisition activity bynecessity face numerous integration challenges. Among themare the complexities related to achieving synergies and cost
reductions and accessing new markets to sustain growth.With so much at risk, talent issues are too often overlooked.And yet, the effective handling of cultural concerns,compensation issues, and retention of pivotal talent can bevital to the success of the newly combined organization.
Merger integration involves effectively managing multiplepriorities. A staggering 70% of deals fail to deliver theirintended benets, often because cultural and people issuesare mismanaged.1 As a result, companies are becomingincreasingly aware that M&A value creation, strategicgrowth, and sustainable business success can hinge on thehuman side of deal making and integration.
With about $84 billion worth of deals in 2010, as comparedwith $71.4 billion in 2009, the transportation and logisticsindustry is enjoying a healthy period of M&A activity andmore deal activity is expected in 2011, with potential for acontinuing focus on passenger, rather than freight,transportation deals2 and an emphasis on expansion in LatinAmerica and Asia.3
T&L companies have special relationships with theiremployees and customers. So missteps in this area canquickly lead to low employee morale and signicant lossof revenue.
The implications of organizational change
Major change in the workplace can cause fear anduncertainty among employees. When organizational changeprograms fail, it is largely because employees feel excludedfrom the process and end up lacking the motivation, skills,and knowledge to adopt new systems and procedures.
These issues come to the forefront during integration. Onecompany, responding to a survey of participants in therecent M&A and Human Capital Roundtable hosted by PwC,reported beginning its retention campaign by posing a keyquestion to incoming employees: Do you see a future foryourself at this company?4
1 When two become one, Hourglass, PwC, December 2010
2 Intersections, PwC, 2010
3 Growth reimagined: Transportation & Logistics industry summary, rom14th Annual Global CEO Survey, PwC, 2011
4 Talking about the people side o M&A, PwC, 2010
Acquisitions for talent
Companies traditionally have pursued deals to achieve
extensions of product and service offerings or expansion intonew geographies. Now talent is becoming a chief reason forM&A activity. Acquisitions often are made specically toexpand the talent pool or gain new capabilitiessecuring aninnovative technology and the talent behind it. Withincreased spending in highly technical areas, companies areoften seeking professionals with very specic skill sets.
These employees are innovators, frequently critical to thebuilding of products and services uniquely identied with theorganization being acquired.
Keeping pivotal talentThe T&L industry has expanded in the major markets as wellas in the BRIC countriesBrazil, Russia, India, and Chinaand is seeking additional growth in the booming emergingmarkets of Vietnam, Indonesia, South Africa, Turkey, andArgentina. Finding, keeping, and motivating employees whohave the right skill sets has become a top corporate priority tosustain this growth; 43% of the 60 T&L CEOs in 31 countriesresponding to the PwC 14th Annual Global CEO Surveyreported plans for revising their people policies to boostemployee engagement and retention. Nonnancialincentives gured heavily into their strategies.
Survey respondents cited identifying and retaining top talentis essential to successful integration efforts and a primaryaspect of the due diligence process, according to PwCresearch. The acquiring company should dene eachemployees importance to the business relative to thetransition and beyond. The company should make anassessment regarding which employees it needs for short-term transition and long-term value creation. When deningthese needs, companies examine three levels of criticality:
Strategically criticalEmployees most essential to theongoing operations of the newly combinedorganizationtypically, top executives, key business
unit leaders, and key individual contributors.
Integration criticalEmployees essential to theintegration effort.
Knowledge-transfer criticalEmployees with specializedknowledge essential to the transfer of ongoinginformation and know-how.
7/31/2019 1Q11 TL MA Report
4/20
2 PwC
Investing heavily in pivotal talent can be a source of majorcompetitive advantage. Pivotal talent comprises the game-changing employees whose performance can make or breakthe bottom line. They are well positioned to add the greatest
value and have the greatest impact on the future success of acompany.
In their efforts to retain pivotal talent, companies areaugmenting discussions about salary and incentives withinformation regarding the shape of the corporate culture. Forexample, should the new organization be one of learning andempowerment or process discipline?
Adding urgency to concerns regarding retention is an issueon the near horizon for railroads and trucking companies:the aging workforce. A high percentage of employees in theseindustries are nearing retirement, according to statistics from
the American Trucking Association (ATA) and theAssociation of American Railroads (AAR). Truckingcompanies experienced a driver shortage of about 180,000 in2010, with an expected shortage of about 500,000 in 2011,according to one analysis.5 Nearly half of the workforce of theCanadian National Railway Co. plans to retire by 2015,according to the organizations CEO.6
Bridging cultural differences
Nearly half of the companies attending the M&A and HumanCapital Roundtable reported that cultural alignmentbridging the potentially value-destroying cultural differencesbetween acquirer and targettakes a full calendar year toachieve. The necessity for insight into cultural differences iseven more crucial when the two organizations are based indifferent countries.
As a result, companies are focusing heavily on:
Assessing the cultural compatibility between the targetand the acquirer.
Developing a culture integration roadmap in the rst 30days, or even before close if there is sufcientinformation about the two organizations
cultural compatibility. Holding the C-suite members accountable for sponsoring
and leading culture change, while empowering functionsand local teams to adapt and begin culture integrationprograms.
5 Improving economy squeezes truck driver supply,by A. Ananthalakshmi, The Economist, April 21, 2010
6 Canadian National May Hire 10,000 Over Five Years as Rail WorkersRetire, by Frederic Tomesco, Bloomberg, July 7, 2010
Launching an effectivecommunications plan
A solid communications plan is paramount during
integration. Continual communications about theacquisitions status and the multiple cultural and other issuesthat employees should face are integral to a satisfactorytransition in which the company retains valuable talent andprevents productivity slowdowns. In such an uncertainenvironment, employees require communications that areregular and accurate, including clarity around leadership, toavoid misinformation.
Managing people and talent issues during and after mergersand acquisitions comes with its own set of challenges. Failureto properly meet these challenges can result in:
Reduced employee morale
Employee exodus
Stakeholder risk
Loss of valuable intellectual property
Continuity concerns
Ultimately, adversely impacted deal value
Companies that merge successfully strive to understand andempathize with the emotional and nancial impact onemployees facing major workplace changes. Often employeesface revisions in their roles, relocations, and potentialcultural conicts. Acquirers can provide salary and other
incentives robust enough to appeal to those professionals ofgreatest value to the organizationduring the transition andgoing forward. Companies that successfully employ thesestrategies can increase their prospects for achieving mergersand acquisitions that bring the intended results, including apost-merger integration that proceeds smoothly from DayOne.
7/31/2019 1Q11 TL MA Report
5/20
3 PwC
The number of deals announced in the rst quarter of 2011approximated the pace of last year, but total value was lower.This decline was mostly driven by the absence of mega deals(deals with a disclosed value of at least $1 billion) for the
quarter compared with 14 such transactions announcedduring 2010.
This quarter seemed to be an anomaly in the recovering dealmarket of the last several quarters. Deal sizes were smallerand valuations declined. However, both of these trends seemlikely to reverse with freight and passenger volumescontinuing their improvement. We base this conclusion onour examination of value and valuation trends post-recessionover the last several business cycles.
Even though there were no mega deals this quarter, it isinteresting that several of the largest deals involved
transportation infrastructure. Infrastructure investment wasa theme of the previous quarter as well, and we expectinterest in these assets to continue because of theirpredictable returns and the potential to use privatization toaddress scal pressures.
Shipping and logistics activity picked up, accounting for fourof the top ve deals this quarter. Logistics M&A should likelysee a boost later this year with the planned TNT spinoff. Incontrast, the passenger air mode may not be as active,
particularly as it concerns Western carriers, because of thecurrent focus by many large industry players on integratingrecent acquisitions.
Asia was the most active region this quarter, which is likelyrelated to the size and growth rates of its economies. Weexpect the importance of Asia as a driver of overall dealactivity to continue, supported by the prevalence of emergingmarket nations that tend to have more fragmentedtransportation sectors.
The deal market this quarter can be described as smaller butstill active. This is likely to change over the balance of 2011.
Buoyed by accommodative capital markets, nancialinvestors remain interested in the sector, and strategicinvestors have continued to improve their liquidity.Accordingly, we are optimistic that deal ow over the fullyear should be robust by historical standards.
PerspectiveThoughts on deal activity in the rst quarter of 2011
Commentary
Quarterly T&L deal activityMeasured by number and value o deals worth $50 million or more
2008 2009 2010 2011
2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
Numberof deals
42 50 49 23 14 26 33 36 33 38 48 37
Total deal value($ billions)
34.4 19.4 22.6 5.6 4.8 8.1 52.8 17.3 14.2 16.9 36.4 8.2
Average deal value($ billions)
0.8 0.4 0.5 0.2 0.3 0.3 1.6 0.5 0.4 0.4 0.8 0.2
7/31/2019 1Q11 TL MA Report
6/20
4 PwC
Smaller targets temper deal value bottomline for T&L companies
M&A activity in the transportation and logistics sector
generally continued its recovery from the recession duringthe rst quarter of 2011, with the number of deals announcedapproximating the pace of deals last year and exceeding thelevel of the year prior. However, the recovery in deal valuetook a step back this quarter as small and middle-marketdeals dominated. This change contributed to a decline inaverage deal value.
0
40
80
120
160
Number of deals with US targets and/or acquirers
Number of deals excluding deals with US targets and/or acquirers
Number of deals
1Q1120102009
Deal activity by number of deals
Measured by number of deals worth $50 million or more
Numberofdeals
9686
10
155
129
2637 34
3
0
20
40
60
80
100
Total deal value for deals with US targets and/or acquirers
Total deal value excluding deals with US targets and/or acquirersTotal deal value
1Q1120102009
Deal activity by total deal value
Measured by value of deals worth $50 million or more
US$
billions
71.4
30.4
41.0
84.9
72.9
12.08.2 7.4
0.8
0%
1%
2%
3%
4%
5%
1Q11
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
Transportation & logistics deal activity relative to all M&A deals
Measured by value and number of all deals
Deal value
Percen
tageo
fM&Adea
lun
iverse
Number of deals
In short, we would characterize the transportation andlogistics deal market as fairly active but with a focus onsmaller transactions. An examination in the nearby chart ofthe sector deal volume and value relative to all global mergerand acquisition activity supports this smaller yet still activeinterpretation.
Looking forward, a recovery in deal totals is expected tocontinue but note that 2010 was a very robust year for T&Ldeal activity, which should make year-over-year comparisonsseem less robust. In addition, 2010 featured a large jump inthe number of deals from the year before. The increase in2010 value over the year prior is even more signicantconsidering it represents a much broader base of deals thanin 2009, when the Burlington Northern railroad acquisitionaccounted for more than half of deal value announced. So weexpect a high level of deal activity this year but note that, atthis time, it seems more likely that deal volume, rather thanvalue, should match 2010 levels.
7/31/2019 1Q11 TL MA Report
7/20
5 PwC
Deal valuations decline
Deal valuation, as measured by value/EBITDA, declinedduring the rst quarter to near a 10-year low. This drop was
somewhat surprising in light of the continued level of dealactivity, and the low total does not seem likely to persist. Asindicated in the nearby chart, multiples had a similar rise andthen dip after the 2001 recession. They then increasedthrough the economic expansion as they also did followingthe 1991 recession. Therefore, if the economic recoverycontinues, we would expect to see a rise in deal valuationgoing forward.
In addition, the low proportion of targets in restructuringor bankruptcy for the quarter signies that distressed dealsremain less common. Accordingly, valuation multiples aremore likely to expand than contract over the rest of 2011.
0
2
4
6
8
10
1Q1120102009
Deal valuation by median value/EBITDA
Measured by value/EBITDA for deals worth $50 million or more
Deal value/EBITDA: 10-yr. median = 7.7x, 5-yr. median = 8.1x
Medianvalue/EBITDA
6.2
8.6
6.6
0
2
4
6
8
10
1Q11
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
Historical deal valuation by median value/EBITDA
Measured by value/EBITDA for deals worth $50 million or more
Medianvalue/EBITDA
US recession
0%
2%
4%
6%
8%
10%
1Q1120102009
Acquisition techniques
Measured by percentage of deals worth $50 million or more
Bankruptcy Restructuring Tender offer
2%
1% 0%
3%
8%
2%
4%
5%
6%
7/31/2019 1Q11 TL MA Report
8/20
6 PwC
Shipping, logistics companies see greatestdeal movement in T&L industry
Shipping and logistics targets have become more popular. In
fact, four of the ve largest deals announced this quarter fallinto these modes. Looking forward, shipping could remain apopular mode for M&A because of lingering concerns aboutovercapacity as demand recovers. It is more difcult to saywhether the shift toward logistics targets may also continue.However, the planned spinoff of TNTs express business andthe potential interest in the spun-off unit as a takeover targetcould drive a focus on logistics targets in future quarters.
Passenger air M&A may take a breather for the next fewquarters with a number of the largest global players, such asBritish Airways-Iberia, United-Continental, Southwest-AirTran, and LAN-TAM, focusing on integration. In addition,
improved airline protability could increase the regulatoryhurdle for getting these deals in Western markets approved.
0%
20%
40%
60%
80%
100%
Other
Rail
Trucking
Logistics
Passenger ground
Shipping
Passenger air
1Q1120102009
Deals by transportation & logistics mode
Measured by value of deals worth $50 million or more
11%
11%
16%
54%
16%
28%
35%
8%
3%
2%
2%
1% 4%
3%
9%
36%
6%
12%
34%
8%
Note: Columns may not total 100 because of rounding.
7/31/2019 1Q11 TL MA Report
9/20
7 PwC
Deal activity by investor group
Measured by number of deals worth $50 million or more
0%
20%
40%
60%
80%
100%
Financial investors
Strategic investors
1Q1120102009
39.6%
60.4%
41.3%
58.7%
45.9%
54.1%
T&L companies build cash
In previous reports we have noted that acquirers were able touse the recession to focus on internal initiatives, such as cost
reduction, and are now better positioned to engage in M&Athanks to their strengthened balance sheets. This trendcontinued during the most recent quarter as top globaltransportation and logistics companies increased their cashpositions signicantly compared with the last several years.
0.0
0.4
0.8
1.2
1.6
2.0
2.4
2.8
Most recent quarter1 Year ago2 Years ago
Liquidity Cash and equivalants
Measured by average of top 50 global T&L public competitors
Source: Company reports
$
billions
1.51
1.97
2.41
Financial investor activity grows
We have previously indicated that healthier capital marketswould likely lead to an increase in nancial investorparticipation, and this held true during the most recentquarter. In fact, the largest deal of the quarter, the ArcusInfrastructure Partners acquisition of Forth Ports, involved anancial investor.
7/31/2019 1Q11 TL MA Report
10/20
8 PwC
Top 5 1Q11 deals
Monthannounced
Targetname
Targetnation
Acquirername
Acquirernation
StatusValue oftransactionin US$ billions
Category
Mar Forth Ports PLC UnitedKingdom
ArcusInrastructure
Partners
UnitedKingdom
Pending 0.93 Shipping
Mar Vantec Corp Japan Hitachi Ltd Japan Pending 0.66 Logistics
Mar Arcapita BankBSCUndisclosedJoint Ventures(2)
Belgium PublicStorage Inc
Belgium Completed 0.59 Logistics
Mar K-SeaTransportationPartners LP
UnitedStates
Kirby Corp UnitedStates
Pending 0.57 Shipping
Mar Gobierno del DistritoFederalPeriericoSur Tollroad
Mexico Investor Group Mexico Completed 0.52 Passenger ground
Mega deals
Mega deals in 2010 (deals with a disclosed value of at least $1 billion)
Monthannounced Targetname Targetnation Acquirername Acquirernation Status
Value of
transactionin US$ billions
Category
Dec Plus ExpresswaysBhd
Malaysia Jelas UlungSdn Bhd
Malaysia Pending 8.30 Passenger ground
Jan Japan Airlines Corp Japan ETIC Japan Completed 8.17 Passenger air
Oct Plus ExpresswaysBhd
Malaysia Investor Group Malaysia Intended 7.46 Passenger ground
May ContinentalAirlines Inc
UnitedStates
UnitedContinentalHoldings
UnitedStates
Completed 3.69 Passenger air
May Transurban Group Australia Investor Group Canada Withdrawn 3.68 Passenger ground
Aug TAM SA Brazil LAN AirlinesSA
Chile Pending 3.43 Passenger air
Nov Eversholt Rail Group UnitedKingdom
3i Inrastruc-ture PLC
UnitedKingdom
Completed 3.42 Rail
Nov HS1 Ltd UnitedKingdom
Investor Group Canada Completed 3.40 Rail
Mar Arriva PLC UnitedKingdom
DeutscheBahn AG
Germany Completed 2.43 Passenger ground
Sep OOO Primorskiytorgovyi port
RussianFed
Kadina Ltd RussianFed
Completed 2.15 Shipping
Oct La Poste SA France France France Pending 2.11 Logistics
Dec DP WorldAustralia Ltd
Australia Citigroup Inc UnitedStates
Completed 1.48 Shipping
Sep Odebrecht TransportParticipacoes SA
Brazil Fundo deGarantia doTempo de
Brazil Completed 1.11 Passenger ground
Sep AirTran Holdings Inc UnitedStates
SouthwestAirlines Co
UnitedStates
Completed 1.04 Passenger air
7/31/2019 1Q11 TL MA Report
11/20
9 PwC
Infrastructure focus continues inlargest transactions
No mega deals, dened as deals with a disclosed value above
$1 billion, were announced during the quarter. This contrastswith the relative urry of mega deals announced during thefourth quarter of 2010. However, several themes from thefourth quarter carried over into 2011 as they pertain to thelargest deals of the quarter.
A major fourth-quarter mega-deal theme was theinvolvement of nancial investors and interest ininfrastructure deals. Notably, the largest deal in the rstquarter of 2011, the $932 million acquisition of Forth Portsby Arcus Infrastructure Partners, had both of thesecharacteristics. Forth Ports is the last publicly traded UK portoperator, and the Arcus offer was accepted after several
previous bids were rejected because of price. In addition, thefth-largest deal announced this quarter, the $520 millionconcession to build and operate the Periferco Sur Toll Road inMexico City, also involved an infrastructure target.
The characteristics of the rest of the top ve deals this quarterwere more varied. The second-largest deal announced duringthe rst quarter was the $657 million acquisition of logisticsservice provider Vantec Corp. by Hitachi Transport.
Hitachi Transport has been active as a consolidator oflogistics companies with multiple acquisitions over the lastyear, and its acquisition of Vantec, which focuses ontransporting auto parts and nished vehicles, would
reportedly make Hitachi Transport the fth-largest logisticsrm in Japan, excluding Japan Post Service Co.
Rounding out the top ve are the third-largest deal of thequarter, the $586 million divestiture of Arcapita Bankscontrolling interest in two self-storage joint ventures tominority investor Public Storage Inc., and the fourth-largestdeal of the quarter, the $573 million merger between KirbyCorp. and K-Sea Transportation Partners. The latter deal isnoteworthy because Kirby has acted as a consolidator in theshipping industry and because it signals the potential forshipping M&A to drive future deal totals.
Mega-deal activity came to a halt during the rst quarter, yetthe outlook for deals of this size remains positive. Whiletransportation infrastructure deals should likely contribute tomega-deal activity this year, key factors are in place thatwould also support mega-deal announcements outsidethis category.
7/31/2019 1Q11 TL MA Report
12/20
10 PwC
Companies turn to in-countryconsolidation; Asian acquirers most active
The regional distribution of transportation and logistics dealactivity during the rst quarter indicates that acquirersmainly were focused on consolidating local markets. In fact,these deals accounted for more than 81% of deal volume, amarked increase from the previous two years.
The Asia and Oceania and UK and Eurozone regions werethe most active as measured by both value and number of
Global transportation and logistics M&A activityMeasured by number and value o deals worth $50 million or more (1Q11)
EuropeLocal8 deals, $2.4 billionInbound5 deals, $0.8 billionOutbound2 deals, $0.3 billion
Asia and Oceania
Local13 deals, $2.3 billionInbound1 deal, $0.1 billionOutbound3 deals, $0.3 billion
North AmericaLocal6 deals, $1.9 billionInbound0 deals, $0.0 billionOutbound2 deals, $0.5 billion
South AmericaLocal3 deals, $0.5 billionInbound1 deal, $0.2 billionOutbound0 deals, $0.0 billion
Regional analysis
deals. Looking forward, Asia and Oceania may lead regionaldeal totals by acquirer because of the aggregate size ofeconomies there. In addition, local-market deals in thisregion could be driven by the preponderance of emergingmarkets, where transportation industries are likely to berelatively fragmented.
Inbound deals to Asia could increase because of interest inthe faster-growing economies in this region, and NorthAmerica could see more inbound attention because ofcontinued weakness in the US dollar.
7/31/2019 1Q11 TL MA Report
13/20
11 PwC
Asia & Oceania UK & Eurozone Europe ex-UK & Eurozone South America Africa/UndisclosedNorth America
Regional distribution of deals by acquirer region
Measured by number of deals worth $50 million or more (1Q11)
16.2%
10.8%
21.6%
8.1%
43.2%
0%
Regional distribution of deals by target region
Measured by number of deals worth $50 million or more (1Q11)
24.3%
10.8%
16.2%
10.8%
37.8%
0%
Regional distribution of deals by acquirer region
Measured by value of deals worth $50 million or more (1Q11)
28.0%
4.8%
29.8%
5.7%
31.8%
0%
Regional distribution of deals by target region
Measured by value of deals worth $50 million or more (1Q11)
34.3%
23.6%
7.9%
29.3%
4.8%
0%
7/31/2019 1Q11 TL MA Report
14/20
12 PwC
With M&A activity steadily increasing across the globe, many companies are facing complex talent-managementchallenges. A number of people issues need to be addressed, including organizational design, integration planning, and thecultural t between the acquirer and the target.
M&A transactions often fail to achieve their desired results for a variety of reasons. Companies can greatly enhance thesuccess of their deals by properly understanding, addressing, and resolving important concerns related to these issuesduring the due diligence stage.
How PwC can help
PwCs People and Change (P&C) practice supports clients by using interviews and surveys to conduct cultural assessmentsto help identify critical issues during merger integration.
PwC helps companies:
PwC spotlight
Use a culture tool that assesses the operational norms of
the organizations coming together and identies howthe norms might affect the integration. The goal is tomap the differences between the operating styles,cultural drivers, and HR policies and practices of thecompanies to give the acquirer a clear picture of the sizeof the gulf between the organizations and decrease anycultural roadblocks to integration progress.
Hold workshops with each organizations senior teamsand agree on an integration culture, a process that helpsthe teams learn to respect each others differences andto start to speak the same language.
Build an elite integration team, relocating starperformers from their usual roles to work withleadership and an effective integration managementofcecompanies can no longer afford to choosemembers of their integration teams based solely onavailability.
Execute a strong, clear communications strategy byproviding the right communications at the right time,and accounting for different levels of employeeunderstanding of the changes. Steady communication isvital, even when there is no major news to announce, asa critical element in combating the distractions andanxiety that result from an integration effort.
Determine whether there are likely to be any signicant
employee-related costs.
Organizations considering a merger or acquisition should
devote appropriate time and resources to merging thecompanies cultures, HR policies and processes, andorganizational reporting relationships. PwCs disciplinedapproach to delivering people integration helps companiesachieve early wins, build momentum, and instill condenceamong stakeholders. PwC takes a proactive approach tohelping clients focus on the right things at the right times,thereby enhancing the value of the deal.
PwCs integration processes support client integration teamsand supplement them with experienced professionals wholl resource and technical gaps as needed.
7/31/2019 1Q11 TL MA Report
15/20
13 PwC
T&L company case studyIntegrating cultures through a shared work style
T&L company expandsits global footprint Issue
When a US-based T&L company extended its reach beyond theborder, it needed to learn more than a new language or two.Suddenly, by acquiring a Europe-based company, the operator
became a global logistics provider with several billion dollars inannual revenue and thousands of employees operating in 30countries. It needed to transform itself from a domestic company toa global onequicklyand integrate multiple organizationalcultures and ways of thinking.
Action PwC worked with the client to develop a 100-day communicationsplan to inform employees, customers, and shareholders about thebusiness combination, telling them about the work ahead.
We also conducted a thorough cultural assessment to determinehow people conducted their work in different business units andgeographic areas of the companies, looking at the implications forbehaviors, processes, and systems. During this assessment, wehelped senior leadership engage employees in conversations aboutintegration, nding a common way of working and developingmetrics that would help the business measure performance andproductivity around the globe.
We helped the client develop a framework for goals, objectives, andbehaviors to guide both corporate actions and individuals. We alsoworked with the client to issue daily communications and updates,using new and traditional media.
Impact With PwCs help, the client quickly transformed itself into a globalorganization that embraces many cultures, yet focuses on sharedbusiness objectives and understands the importance of collaborationand a common work style. Employees felt a greater sense ofownership because they were engaged in discussions withleadership as changes were made.
7/31/2019 1Q11 TL MA Report
16/20
14 PwC
Deep transportation and logisticsexperience
PwC provides advisory, assurance, or tax services for more
than 93% of the transportation and logistics companieslisted on the Fortune 500. Our Transportation & Logisticspractice is composed of a global network of approximately4,900 industry professionals who service nearly 300 publicand private companies around the world. Central to thesuccessful delivery of our services is an in-depthunderstanding of todays industry issues and ourcommitment to delivering economic value throughspecialized resources and international leading practices.Our highly skilled team encourages dialogue regardingcomplex business issues through active participation inindustry conferences and associations, such as the AirTransport Association, American Trucking Association,
American Railroad Association, and European LogisticsAssociation.
Quality M&A deal professionals
PwCs Transaction Services practice consists of more than6,500 dedicated deal professionals worldwide. The depth oftheir industry and functional experience enables them to
PwC experience
Asia
North America & the Caribbean5,000 Industrial Products professionals420 Transportation & Logistics industry professionals
South America
2,300 Industrial Products professionals280 Transportation & Logistics industry professionals
Europe14,200 Industrial Products professionals2,330 Transportation & Logistics industry professionals
Australia & Pacific Islands
1,300 Industrial Products professionals210 Transportation & Logistics industry professionals
8,300 Industrial Products professionals1,500 Transportation & Logistics industry professionals
Middle East & Africa
1,200 Industrial Products professionals185 Transportation & Logistics industry professionals
advise clients regarding factors that could affect a transactionacross the deal continuum. From initial due diligence andevaluation to preparation for Day One and post-close mergerintegration, our teams are committed to capturing value
throughout the deal process and achieving our clientsobjectives. These functional areas include, but are not limitedto, sales and marketing, nancial accounting, tax, humanresources, information technology, risk management, andsupply chain. Teamed with our Transportation & Logisticsindustry practice, our deal professionals can bring a uniqueperspective to your transaction, addressing it from a technicaand industry point of view.
Local coverage, global connection
In addition to global transportation and logistics resources,our team is part of a large Industrial Products group thatconsists of more than 32,000 professionals, includingapproximately 17,000 providing assurance services, 8,300providing tax services, and 7,000 providing advisory services.This expands our global footprint and enables us toconcentrate efforts in bringing clients a greater depth oftalent, resources, and know-how in the most effective andtimely way.
7/31/2019 1Q11 TL MA Report
17/20
15 PwC
Contacts
Global T&L LeaderKlaus-Dieter Ruske+49.211.981.2877
klaus-dieter.ruske@de.pwc.com
Global T&L Advisory LeaderBert Kuypers+32.2.710.4532bert.kuypers@be.pwc.com
United Kingdom T&L LeaderClive Hinds+44.1.727.89.2379clive.p.hinds@uk.pwc.com
Central and Eastern Europe T&L LeaderNick Allen+42.0.251.151.330nick.allen@cz.pwc.com
Brazil T&L LeaderLuciano Sampaio+55 11 3674 2451luciano.sampaio@br.pwc.com
China-Hong Kong T&L LeaderAlan Ng+852.2289.2828alan.ng@hk.pwc.com
Australia T&L LeaderJoseph Carrozzi+61.2.8266.1144joseph.carrozzi@au.pwc.com
Middle East T&L LeaderAlistair Kett+971.0.2694.6831
a.kett@ae.pwc.com
Global Logistics and Post CoordinatorKenneth H. Evans+1.305.375.6307kenneth.evans@us.pwc.com
Global Rail and Infrastructure CoordinatorJulian Smith+44.20.7804.5940julian.smith@uk.pwc.com
Global Shipping and Ports CoordinatorSocrates Leptos-Bourgi+30.210.428.4000socrates.leptos.-.bourgi@gr.pwc.com
Global Airlines and Airports CoordinatorMartha Elena Gonzalez+52.55.5263.6000martha.elena.gonzalez@mx.pwc.com
Global T&L Business Development and MarketingPeter Kauschke+49.211.981.2167peter.kauschke@de.pwc.com
Global T&L Knowledge ManagementUsha Bahl-Schneider+49.30.2636.5425usha.bahl-schneider@de.pwc.com
PwC Transportation & Logistics practice
US T&L Industry LeaderKenneth H. Evans+1.305.375.6307
kenneth.evans@us.pwc.com
US T&L Advisory LeaderChuck Marx+1.602.820.7801 charles.a.marx@us.pwc.com
US and Global T&L Tax LeaderMichael J. Muldoon+1.904.366.3658michael.j.muldoon@us.pwc.com
US T&L Transaction Services PartnerDana Drury+1.214.758.8245dana.drury@us.pwc.com
US T&L Transaction Services DirectorRichard E. Hasselman+1.678.419.1669rick.hasselman@us.pwc.com
US T&L DirectorBryan Terry+1.678.431.4676 bryan.terry@us.pwc.com
US T&L Senior ManagerDavid Mandelbaum+1.646.471.6040 david.n.mandelbaum@us.pwc.com
US T&L Assurance Senior ManagerJeffrey J. Simmons+1.214.979.8606
jeffrey.j.simmons@us.pwc.com
US Industrial Products DirectorNeelam Sharma+1.973.236.4963neelam.sharma@us.pwc.com
US Industrial Products Marketing ManagerDiana Garsia+1 973.236.7264diana.t.garsia@us.pwc.com
US Industrial Products Sector AnalystTom Haas+1.973.236.4302thomas.a.haas@us.pwc.com
US Research AnalystMichael Portnoy+1.813.348.7805michael.j.portnoy@us.pwc.com
Editorial ContributorPhilip Booth+1.813.348.7815philip.booth@us.pwc.com
7/31/2019 1Q11 TL MA Report
18/20
16 PwC
Contacts
PwC Global Transaction Services practice
Global Transaction Services LeaderColin McKay+1.646.471.5200
colin.mckay@us.pwc.com
US Transaction Services LeaderMartyn Curragh+1.646.471.2622martyn.curragh@us.pwc.com
Europe Transaction Services LeaderPhillippe Degonzague+33.01.5657.1293phillippe.degonzague@fr.pwc.com
Asia-Pacic Transaction Services LeaderChao Choon Ong+65.6236.3018 chao.choon.ong@sg.pwc.com
US Transaction Services, AssuranceBrian Vickrey+1.312.298.2930brian.vickrey@us.pwc.com
US Transaction Services, TaxMichael Kliegman+1.646.471.8213michael.kliegman@us.pwc.com
US Transaction Services, Merger IntegrationDavid Limberg+1.216.875.3506david.limberg@us.pwc.com
7/31/2019 1Q11 TL MA Report
19/20
17 PwC
Methodology
Intersections is an analysis of mergers and acquisitions in theglobal transportation and logistics industry. Information wassourced from Thomson Reuters and includes deals for whichtargets have primary NAICS codes that fall into one of the
following NAICS industry groups, NAICS industries, ornational industries: scheduled air transportation;nonscheduled air transportation; rail transportation;deep-sea, coastal, and Great Lakes water transportation;inland water transportation; general freight trucking;specialized freight trucking; urban transit systems;interurban and rural bus transportation; taxi and limousineservice; school and employee bus transportation; charter busindustry; other transit and ground passenger transportation;support activities for air transportation; support activities forrail transportation; support activities for watertransportation; other support activities for roadtransportation; freight transportation arrangement; other
support activities for transportation; postal service; localmessengers and local delivery; general warehousing andstorage; refrigerated warehousing and storage; otherwarehousing and storage; and process, physical distribution,and logistics consulting.
This analysis includes all individual mergers and acquisitionsfor disclosed or undisclosed values, leveraged buyouts,privatizations, minority stake purchases, and acquisitions of
remaining interest announced between January 1, 2007, andMarch 31, 2011, with a deal status of completed, intended,partially completed, pending, pending regulatory approval,unconditional (i.e. initial conditions set forth by the acquirer
have been met but deal has not been completed), withdrawn,seeking buyer, or seeking buyer withdrawn. The term deal,when referenced herein, refers to transactions with a disclosedvalue of at least $50 million unless otherwise noted.
Regional categories used in this report approximate UnitedNations (UN) regional groups as determined by the UNStatistics Division, with the exception of the North Americaregion (includes North America and Latin and Caribbean UNgroups), the Asia and Oceania region (includes Asia andOceania UN groups), and Europe (divided into UnitedKingdom plus Eurozone and Europe ex-UK and Eurozoneregions). The Eurozone includes Austria, Belgium, Cyprus,
Estonia, Finland, France, Germany, Greece, Ireland, Italy,Luxembourg, Malta, the Netherlands, Portugal, Slovakia,Slovenia, and Spain. Oceania includes Australia, NewZealand, Melanesia, Micronesia, and Polynesia. Overseasterritories were included in the region of the parent country.China, when referenced separately, includes Hong Kong.International Monetary Fund classications were used tocategorize economies as advanced or developingand emerging.
7/31/2019 1Q11 TL MA Report
20/20
Visit our transportation and logistics industry websiteat www.pwc.com/us/industrialproducts 2011 PricewaterhouseCoopers LLP. All rights reserved. PricewaterhouseCoopers and PwC reer to PricewaterhouseCoopers LLP (a Delaware limited liability partnership) or, as the contextrequires, the PricewaterhouseCoopers global network or other member frms o the network, each o which is a separate and independent legal entity. This document is or general inormationpurposes only, and should not be used as a substitute or consultation with proessional advisors. MW-11-0306
PricewaterhouseCoopers has taken all reasonable steps to ensure that inormation contained herein has been obtained rom reliable sources and that this publication is accurate and authoritativein all respects However it is not intended to give legal tax accounting or other proessional advice I such advice or other expert assistance is required the services o a competent proessional
Recommended