Investors

Transport, logistics deals on the rise

Deal activity in the transport and logistics sectors was up both in terms of volume and value in the fourth quarter of 2013, with infra accounting for the majority of mega deals.

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Global merger and acquisition (M&A) activity in the transportation and logistics industry was up an impressive 57 percent in deal volume and more than 100 percent in deal value in the last quarter of 2013, according to a report by the US division of financial services firm PricewaterhouseCoopers (PwC).

While the fourth quarter of 2013 was the second highest in quarterly deal volume and deal value, 2013 overall was near 10-year lows with 185 deals totaling $65.2 billion.

There were 66 transportation and logistics transactions worth $50 million or more in the fourth quarter, totaling $23.2 billion, compared with 42 deals worth $10.7 billion in the previous quarter.

Infrastructure assets continued to dominate in the mega-deal category – that is, deals worth $1 billion or more – not only in the fourth quarter but in 2013 overall.

“2013 ended with one of the lowest volume of mega deals […] of the last 10 years with only 11 such announcements,” PwC said. “However, infrastructure remained active even among a diminished level of mega deals with several airport and, to a lesser extent, port transactions among the year’s top deals.”

Geographically, Asia and Oceania continued to be the most active region in both the fourth quarter and full-year 2013, while the US and the Eurozone lagged behind as deal-making activity in those regions has not yet returned to pre-economic crisis levels.

Another trend the financial services firm identified in the fourth quarter was the prevalence of local market deals, which accounted for 71 percent of activity.

PwC expects double-digit growth in 2014, forecasting a 10.5 percent growth in deal volume and a 15.5 percent growth in deal value compared with last year, “supported by a continued global economic expansion and global industrial production,” Jonathan Kletzel, PwC’s US Transportation and Logistics leader said.

“However, acquirers should remain cautious and continue their focus on small, local deals with more easily-achievable synergies,” he added.