Harkness Capital Partners has agreed to sell Kane Logistics to ID Logistics. No financial terms were disclosed. Based in Scranton, Pennsylvania, Kane Logistics is a third-party logistics firm.
ORGON, France–(BUSINESS WIRE)–Regulatory News:
ID Logistics (Paris:IDL) (ISIN: FR0010929125, Ticker: IDL), one of the European leaders in contract logistics announces the signing of the acquisition to acquire 100% of Kane Logistics, an American pure player in contract logistics.
Eric Hémar, Chairman and CEO of ID Logistics comments: “The acquisition of Kane Logistics represents one of the most important external growth operations in the history of the company. After starting in 2001 with a few large retail customers that we were able to quickly support internationally, the company shifted to e-commerce and retail preparation in 2013 with the acquisition of CEPL. It then strengthened its presence in Europe with the recent acquisition of GVT in Benelux. Today, with the acquisition of Kane Logistics, we are opening up new prospects in North America, where we are enhancing our know-how, in particular with consumer package goods customers, and welcoming experienced and dynamic managers to our team.”
Acquisition of Kane Logistics
Kane Logistics is a pure player in value-added warehousing and contract logistics founded in the United States in 1930 by the Kane family. The business was acquired by Harkness Capital Partners in 2019 with the goal of building the Company’s platform and accelerating growth. Over the past 3 years, Kane Logistics has deeply transformed itself to become a leading player in contract logistics, notably with blue-chip consumer packaged goods and food and beverage manufacturers, and distribution specialists. By adding value-added services to traditional logistics services, and strengthening its overall team, Kane Logistics has grown its revenue by +20% annually since 2019 to reach $235 million by 2021. Kane Logistics now operates 20 hubs across the country (especially in Pennsylvania, Georgia, Ohio, Illinois and California) representing 725,000 square meters.
This shift was led by an experienced management team with deep operating experience, including at leading contract logistics companies such as Ryder, and Jacobson Companies (the U.S. based logistics business acquired in 2014 by Norbert Dentressangle). The Kane team will continue with the Company post the closing of the investment with a continued focus on providing world-class customer service and growing its customer base.
Tony Tegnelia, CEO of Kane Logistics, adds: “I believe very strongly that the cultural fit between the two organizations is close to perfect. ID Logistics is the ideal next partner to move the Company forward, to serve our customers, and to help maintain our growth trajectory. Their cultural values are a mirror of our values, and they also have a very strongly committed management team.”
Ted Dardani, Partner at Harkness Capital and Kane Board member concludes: “The combination of ID Logistics and Kane Logistics creates a strong opportunity for continued future growth. The Kane team has done a great job in further building the business over the past few years. We benefited from and appreciated the leadership and long heritage of the Kane family in creating a company dedicated to serving its customers. The next chapter for ID and Kane should be equally exciting.”
This transaction is particularly relevant because of the close proximity of the company’s cultures, complementary customer portfolios and the potential commercial synergies. Indeed, Kane Logistics has a business model very similar to the one of ID Logistics: asset light approach, dedicated warehouses, and providing solutions adapted to the specific needs of each customer. In addition, the “key account” approach employed by both companies enables them to offer common solutions in the United States and Europe.
Two years after its first steps in the United States with the acquisition of Nespresso’s logistics operations, ID Logistics has the means to achieve its ambitions in a high-potential region. The group will rely on the management of Kane Logistics to manage all its North American activities.
Financial details of the operation
At closing, the transaction will be based on an enterprise value of $240 million and will be settled entirely in cash. ID Logistics will maintain a sound financial structure with a pre-IFRS16 debt ratio estimated at 2.6x post-acquisition proforma EBITDA. This acquisition will be accretive on the EBITDA of the ID Logistics group from the first year of consolidation.
The transaction remains subject to the approval of the competent US antitrust authorities (Hart-Scott-Rodino Antitrust Improvement Act). The acquisition is expected to be completed before the summer of 2022.
ABOUT ID LOGISTICS
ID Logistics managed by Eric Hémar is an international contract logistics group, with revenue of €1,911 million ($2,179 million) in 2021. ID Logistics manages 350 sites across 17 countries, representing nearly 7.0 million square meters of warehousing facilities in Europe, America, Asia and Africa, with 25,000 employees. With a client portfolio balanced between retail, industry, detail picking, healthcare and e-commerce sectors, ID Logistics is characterized by offers involving a high level of technology. Developing a social and environmental approach through a number of original projects since its creation in 2001, the Group is today resolutely committed to an ambitious CSR policy. ID Logistics is listed on Compartment A of Euronext’s regulated market in Paris (ISIN Code: FR0010929125, Ticker: IDL).