Platinum sells ACR Logistics

The US private equity firm has exited its investment in the firm previously known as Hays Logistics less than 18 months after acquisition.

Los Angeles-based Platinum Equity has agreed to sell portfolio company ACR Logistics to global logistics firm Kuehne + Nagel International.

The transaction, which values ACR Logistics at almost €500 million, is expected to be completed in early 2006. Kuehne + Nagel said it paid €440 million for the entire share capital of ACR Logistics and assumed €50 million in debt.

Platinum acquired the business, known at the time as Hays Logistics, from Hays plc in February 2004 for £102.4 million (€149 million; $179 million), before being renamed as ACR Logistics. The original acquisition was made from Platinum Equity Capital Partners fund, which closed in 2004 on €700 million.

“When we acquired the business, there were some customer concerns that needed stabilising and there were some parts of the business that we didn’t see as part of the long-term strategy,” Brian Wall, managing director, Europe, Platinum Equity told PEO. “We worked with the management team for the first three to six months, improving customer relationships and exiting non-core pieces of the business, which led to growth in revenue of about six percent from 2004 to 2005.”

According to Wall, Platinum hadn’t intended to sell the business at this point. “We engaged Lehman Brothers as an advisor, not to launch a sales process, but conversations with Kuehne + Nagel materialised and we realised that we had done what we could do with the business and it would be in very good hands with them.”

Headquartered in Paris, the firm provides supply chain design, information systems and data management, distribution centre and transport services, and asset management of returnable transport packaging and not-for-sale goods. ACR Logistics is forecasting revenue in excess of €1.3 billion in 2005.

Founded in 1995 by chairman and chief executive officer, Tom Gores, Platinum Equity has acquired more than 50 businesses, and currently has a portfolio of 21 firms, mainly in the provision of services and infrastructure support sectors.