ND and TOG = UK's third largest operator
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CM COVER STORY
dominic.perry1Brbi.co.uk NORBERT Dentressangle (ND) has catapulted itself up the rankings of UK logistics and transport operators with its £196m capture of rival TDG earlier this week.
The deal, paid for from ND's reserves and credit lines, takes the French logistics giant to third place in the UK (by turnover) behind fl-IL and Wincanton, although at a European level it is now in fourth place behind DHL.
Kuehne Nagel and Schenker with a combined annual turnover of €3.6bn (£.2.8bn).
Francois Bertreau, the CEO of ND, has praised the good strategic fit of TDG, which enables it to grow across iN three divisions; logistics, transport and freight forwarding.
Bertreau explains; "It's an important move for ND because of the size it gives us — it will increase the volume of the business by 20%. In addition, it makes us more international and therefore the [proportion of business inj France decreases."
The acquisition means that 57% of its revenues are now from outside its home country.
Although ND has spent less than the £222m paid by its former owners DouglasBay Capital, a large chunk of TDG's warehouse portfolio has been transferred to sister firm DouglasBay Property over the last few years — some £7.3m-worth in 2010 alone — leaving TDG "asset light".
Nonetheless, Bertreau believes that the acquisition, and approximately £.700m of additional turnover and £26m of profit. will provide a significant boost for ND, not least in the fledgling forward
ing operation. Although the deal takes ND's turnover in this sector to €100m (£83.8m), it has ambitious targets to grow this business to the €250m-€300m (1209m to 1:251m) level by 2014.
However, analysts have expressed concern at the level of debt taken on by ND, with the acquisition pushing its gearing back up to the level seen shortly after its acquisition of Christian Salvesen in October 2007 Thomas Cullen, senior analyst at Transport Intelligence, says: "With a renewed pile of debt, ND is going to have to work hard to make its purchase successful, While TDG is a profitable company, probably without many serious management issues, it does represent a change of direction for ND.
-Half of the ND business is now contract logistics and that is a different business to road freight."
Bertreau says that, as with the integration of Salvesen, the TDG brand will disappear as it is absorbed into ND. He stresses that it is too early to speculate over any potential job cuts or site closures.
The deal is subject to approval from the European Commission.