Introduction to BG Strategic Advisors BG Strategic Advisors

Introduction to
BG Strategic Advisors
The Leading
g Investment Bank for
the Supply Chain Sector
Copyright © 2008 by BG Strategic Advisors
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means —
electronic, mechanical, photocopying, recording or otherwise — without the permission of BG Strategic Advisors.
BG Strategic Advisors Overview:
Helping Clients Maximize Value through Strategy-Led Investment Banking
Acquisition
Due
Diligence
Strategy
Capital
Page 2
Sale
BG Strategic Advisors Overview:
Helping Clients Maximize Value Through Strategy-Led Investment Banking
Acquisition
BGSA helps clients manage
due diligence processes,
identify key issues, and
ensure alignment between
M&A and strategy.
Due
g
Diligence
Strategy
gy
Capital
BGSA enables client buyers to
pursue winning multi-acquisitionled growth strategies
strategies.
Sale
BGSA helps client sellers
to achieve the highest
valuations and best
strategic fit in the logistics
and supply chain sector.
BGSA enables clients to finance growth and/or
gain liquidity
ga
qu d ty tthrough
oug supe
superior
o access to both
bot
debt and equity capital markets.
BG Strategic Advisors is unique in its ability to provide clients with strategy-led
investment banking services. With the right strategic foundation, BGSA clients are
able to create unsurpassed value through intelligent, integrated deal-making.
Page 3
BG Strategic Advisors:
The Leading Logistics Investment Bank
Logistics
Thought
Leader
First Call for Buy-Side
Buy Side
Acquisition Strategy
And Execution
Leading Advisor on
Premium Sell
Sell-Side
Side Deals
Th BGSA Platform
The
Pl tf
Page 4
BG Strategic Advisors:
The Leading Logistics Investment Bank
• Industry-leading conference: BGSA Supply Chain Conference
Logistics
Thought
Leader
• Articles: Supply Chain Management Review, Journal of Commerce,
Traffic World, Transport Topics, Logistics Quarterly, New York Times,
and BusinessWeek
• Chairman, Board or Speaker: IARW, IWLA, 3PL Summit, AMB,
CSCMP, NASSTRAC, Supply Chain Asia, China Supply Chain Council,
and others
First Call for Buy-Side
Buy Side
Acquisition Strategy
And Execution
Leading Advisor on
Premium Sell
Sell-Side
Side Deals
Th BGSA Platform
The
Pl tf
Page 5
Maximizing Merger:
Auction to Maximize Strategic Fit and Growth
Context
• Wilpak Inc
Inc. is a leading Atlanta
Atlanta-based
based supply chain management company
focused on contract packaging, contract manufacturing, and logistics.
• The company’s objective was to explore a potential sale of the business.
Approach
• Wilpak hired BG Strategic Advisors to evaluate their options.
• In our positioning of the company, we highlighted Wilpak’s niche leadership
in helping consumer products companies to bring their products to new
markets, its strong EBITDA margins and explosive growth.
• We conducted a broad auction process targeting logistics providers
seeking to offer a full suite of logistics services.
• While conducting a broad auction, we controlled the process, minimized
the risk of information leakage, and ensured that buyers treated the
process seriously
seriously.
• Through a well-run marketing process and correct identification of the most
likely buyers, we achieved a record premium.
Results
• Wilpak was sold to the Jacobson Companies.
• Wilpak achieved its earn-out and received a double-digit EBITDA multiple.
• Wilpak received additional value via share appreciation in Jacobson.
Page 6
Bold Buyer:
Pursuit of New Markets Through Merger
Context
• PWC Logistics is the top Mideast
Mideast-based
based global logistics firm,
firm providing
supply chain solutions to the US Department of Defense and a broad
range of multi-national companies.
• The company was seeking to expand into Asia through the acquisition of
a high-quality specialty freight forwarding company.
Approach
• PWC Logistics retained its advisor, first to outline strategic options, and
second to identify and execute on attractive acquisitions.
• PWC and its advisor initiated discussions with Trans-Link, a Singaporebased exhibition logistics and freight forwarding company with high levels
of differentiation, customer satisfaction, and niche leadership.
• The core drivers of the fit included the opportunity for both parties to
pursue new markets through a merger.
Results
• PWC Logistics completed the acquisition of Trans-Link.
longer term.
• Most of the senior management remained longer-term.
• PWC’s market value more than doubled that year.
• The combined entity, with a market capitalization in excess of $6 billion,
became well-positioned to pursue integrated supply chain solutions in
both the Mideast and Asia.
Page 7
Savvy Seller:
Limited Auction to Maximize Price and Confidentiality
Context
• Unicity Integrated Logistics and Unicity Customs Brokerage provide cross
crossborder, US-Canada transportation solutions to multi-national companies.
• The company’s objective was to explore a potential
sale of the business.
y was important,
p
, but valuation expectations
p
were high
g enough
g
• Confidentiality
that a multi-party process was chosen.
Approach
• In Unicity and its advisor’s positioning of the company, the approach
highlighted Unicity’s niche leadership in helping multi-national companies to
reduce their inventory carrying cost in Canada through the shift from
warehousing to cross-dock operations.
• Unicity and its advisor identified ten key buyers who would be a particularly
compelling strategic fit, and ran a highly-competitive process to select the
appropriate partner.
• The sellers had originally expected to depart, but agreed to stay on for at
least two years, since the buyers were focused on management retention.
Results
• Unicity was sold to PBB Global Logistics for $45 million.
• Unicity management became a platform for PBB’s growth.
• Livingston bought the combined entity, which merged to form the top
C
Canadian-based
di b
d cross-border
b d supply
l chain
h i company.
Page 8
Maximizing Merger:
Auction to Maximize Strategic Fit and Growth
Context
• Di
Dixie Warehouse Services is a value‐added warehouse and transportation 3PL i W h
S i
i
l
dd d
h
dt
t ti 3PL
provider headquartered in Kentucky with additional operations in Louisiana.
• The company’s objective was to explore a sale of the business to an acquirer with the best strategic and cultural fit.
Approach
• Dixie hired BG Strategic Advisors to evaluate and advise the company on its options. • We immediately recognized Dixie’s leadership as the largest independent value‐
added warehouse provider in Kentucky, its roster of multi‐national blue chip customers, its strong contractual revenue base, its management expertise and its numerous customer and industry awards.
• We conducted a broad auction process targeting logistics providers seeking to broaden their logistics suite.
• Through
Through a well‐run marketing process and correct identification of the most likely a well run marketing process and correct identification of the most likely
buyers, we achieved a valuation which met our client’s expectation and paired Dixie with an ideal strategic partner.
Results
• Dixie was sold to Jacobson Companies.
Dixie was sold to Jacobson Companies
• Jacobson offered a complementary culture and strong strategic vision.
•
Dixie acquired additional service capabilities including freight management services and enhanced packaging capabilities.
• Jacobson
Jacobson became the fourth largest value‐added 3PL provider in the nation, became the fourth largest value added 3PL provider in the nation
enhanced its already impressive customer base and gained a significant Southeast presence.
Page 9
The Supply Chain Market Today:
Available
e Market Sh
hare For Co
ompanies Below Top 50
In a High-Growth, High-Fragmentation Market, How Should You Compete?
80%
Air/Ocean
70%
60%
Transportation
Management
Packaging
50%
40%
Slow-Growth,,
Fragmented
High-Growth,
g
,
Fragmented
Slow-Growth,
C
Consolidated
lid t d
High-Growth,
C
Consolidated
lid t d
Value-added
warehousing
30%
20%
10%
0%
Dedicated
(DCC)
P
Parcel
l
5%
-10%
10%
15%
20%
25%
30%
Annual Market Growth Rate
= $10 billion market size
Source: Armstrong & Associates, BG Strategic Advisors analysis
Page 10
The Supply Chain Market 2008:
As Consolidation Continues, How Should You Respond?
U.S. Logistics Market Map: Top 50 Companies
Total = $63.9 Billion
$17.4 B
$16.2 B
Phoenix
Stonepath
Cat Logistics
PWC (Geologistics)
Menlo
Arnold (Jacobson)
Logistics Insight
Maersk Logistics
NYK Logistics
$17.9 B
100%
80%
60%
C. H. Robinson Worldwide
DHL Exel Supply Chain
Expeditors
Pacer
DHL (Danzas, AEI)
Landstar
Genco
Versacold ((P&O))
Menlo
Kuehne & Nagel
Americold
Greatwide
Averitt Express
JB Hunt Dedicated
Werner Enterprises
Cat Logistics
Ryder Systems
Hub Group
40%
UPS
Penske
DHL Exel Supply Chain
(Exel. T&B)
Schneider
UPS
Schenker (BAX Global)
20%
C. H. Robinson Worldwide
20%
Air/Ocean Freight
Forwarding
Note: Only includes the top-50 companies, or $64 billion.
Total U.S. logistics market is actually over $110 billion.
Page 11
R an Logistics
Ruan
CEVA (TNT)
Ryder Systems
Penske
0%
Cardinal
U.S. Xpress Enterprises
Swift Transportation
APL (GATX)
EGL (Circle)
UPS
((Menlo, Fritz))
$12.4 B
40%
Non-Asset-Based Surface
Transportation
60%
Value-Added Warehouse
80%
Asset-Based
Transportation
100%
Eimskip
The Supply Chain Market 2008:
The Effect of Global Strategic Buyers
on the Marketplace
U.S. Logistics Market Map: Top 50 Companies
Deutsche Post
CEVA
NOL (APL)
Schenker (DB)
Total = $63.9 Billion
$17.4 B
$17.9 B
100%
Agility
Phoenix
Cat Logistics
Stonepath
PWC (Geologistics)
Menlo
Maersk Logistics
NYK Logistics
C. H. Robinson Worldwide
DHL Exel Supply Chain
80%
Expeditors
Pacer
DHL (Danzas, AEI)
Landstar
$16.2 B
$12.4 B
Arnold (Jacobson)
Cardinal
Logistics Insight
Genco
Versacold ((P&O))
Menlo
U.S. Xpress Enterprises
Swift Transportation
Ruan Logistics
Greatwide
CEVA (TNT)
Americold
Averitt Express
JB Hunt Dedicated
APL (GATX)
60%
Ryder Systems
EGL (Circle)
Penske
Kuehne & Nagel
Werner Enterprises
Cat Logistics
Hub Group
40%
20%
0%
C. H. Robinson Worldwide
20%
Air/Ocean Freight
Forwarding
Note: Only includes the top-50 companies, or $64 billion.
Total U.S. logistics market is actually over $110 billion.
Page 12
UPS
Penske
DHL Exel Supply Chain
(Exel. T&B)
Schneider
UPS
Schenker (BAX Global)
UPS
((Menlo, Fritz))
Ryder Systems
40%
Non-Asset-Based Surface
Transportation
60%
Value-Added Warehouse
80%
Asset-Based
Transportation
100%
The Supply Chain Market 2008:
The Effect of Private Equity Investment
on the Marketplace
U.S. Logistics Market Map: Top 50 Companies
GTCR
Investcorp
Oak Hill
Apollo
Total = $63.9 Billion
$17.9 B
100%
Phoenix
Stonepath
80%
60%
$17.4 B
$16.2 B
$12.4 B
Cat Logistics
Arnold (Jacobson)
Cardinal
Logistics Insight
Genco
Versacold (P&O)
Menlo
U.S. Xpress Enterprises
Swift Transportation
PWC (Geologistics)
Menlo
Maersk Logistics
NYK Logistics
C. H. Robinson Worldwide
DHL Exel Supply Chain
Expeditors
Pacer
DHL (Danzas, AEI)
Landstar
R
Ruan
L
Logistics
i ti
Greatwide
CEVA (TNT)
Americold
Averitt Express
JB Hunt Dedicated
APL (GATX)
R d S
Ryder
Systems
t
EGL (Circle)
Penske
Kuehne & Nagel
W
Werner
Enterprises
E t
i
Cat Logistics
Ryder Systems
Hub Group
40%
UPS
Penske
DHL Exel Supply Chain
(Exel. T&B)
Schneider
UPS
Schenker (BAX Global)
20%
UPS
((Menlo,, Fritz))
0%
C. H. Robinson Worldwide
20%
Air/Ocean Freight
Forwarding
Note: Only includes the top-50 companies, or $64 billion.
Total U.S. logistics market is actually over $110 billion.
Page 13
40%
Non-Asset-Based Surface
p
Transportation
60%
Value-Added Warehouse
80%
Asset-Based
p
Transportation
100%
The Quickening Pace of Consolidation:
Global Giants Are Increasing Their Share
Top 50 Market Share
• The top 50 logistics providers are taking a larger and larger share of the overall market
• How do you ensure your company’s continued participation and relevance in the long term?
Page 14
An Owner’s Options Amidst Market Uncertainty:
What Should You Do to Ensure Success?
An Owner’s Options
Explore Strategic Alternatives
Do It Yourself
Strengths
• Lowest cost
Weaknesses
• Will consume
months or years of
your time
• Your focus is
diverted from
managing the
business
• Limited to finding
partners through
your own network
Page 15
Maintain Status Quo
Business Broker
Strengths
• Assistance in
presenting your
company to
prospective
buyers
Weaknesses
• Lack of
expertise
• Limited network
• Do they know
supply chain?
Bulge Bracket
Investment Bank
Strengths
• More credibilityy
• Rolodex
• Transaction
experience
Weaknesses
• Fees
• Limited
experience with
smaller, private
companies
• Do they know
pp y chain?
supply
BG Strategic Advisors
Strengths
• Best track record
in supply chain
M&A
• Largest rolodex of
supply chain
CEOs (over
4,000)
• Recognized as
the thought leader
in supply chain
M&A
Weaknesses
• The best
expertise and
service comes
with a premium
price
BG Strategic Advisors:
Leading M&A Advisor to the Supply Chain Sector
Representative Clients / Relationships
Page 16
Why Sophisticated Clients Choose BG Strategic Advisors
Page 17
Eric Wilhelm,
CEO
“Wilpak is a niche leader in the supply chain. We needed a banker who could
communicate our unique capabilities to the right partners. We were lucky to
have BGSA to work with us. They knew the best buyers, they understood how to
position us, they ran a tight process, and they delivered. Thanks to BGSA, we
generated several times the value we might have otherwise received. They were
expensive, but worth it! That’s the BGSA premium. I recommend them highly.”
Sean Snow,
President
“As a large company, CR England didn’t just need a banker. We needed deep
industry expertise. BGSA knows the logistics market better than any M&A
advisor. They helped us every step of the way, from board-level strategy to
acquisition identification to deal closing. We consider BGSA an indispensable
part off our M&A
& successes.”
Alex Berzofsky,
Principal
“Warburg Pincus is one of the most active private equity firms in the supply chain
and logistics sector. When we look at deals in the supply chain, BGSA is top of
mind. They do great work, their ideas are high-quality,
high quality, and their knowledge of
the logistics sector is second to none.”
Don Smith,
President and COO
“BGSA worked patiently to find the best strategic partner that would enable us to
grow despite challenging markets. BGSA didn't just look at the financial
implications They helped us identify the best fit
implications.
fit, financially and culturally
culturally. They
were very responsive and attentive to our questions and concerns, which was
especially appreciated since this was our first sale experience. BGSA’s
experience enabled them to manage the laborious process with accurate
expectations, and helped us manage some of the emotional aspects of the
process We are extremely pleased to have had BGSA representing us
process.
us.”
BGSA Process:
Sell-side Steps
Sell-side Process
Action items
Weeks 0-12
Phase I mark
keting
„ Contact buyers
„ Send confidentiality
agreement
„ Phase I process letter
„ Send marketing supplement
„ Prepare due diligence materials
First round bids
FIRST ROUND BID
Phase II marke
eting
„ Send phase II process
Weeks 12-15
Buyers sign confidentiality agreement
letter
„ Management presentations
„ Site visits
„ Due diligence/data room
10 15 first round bids
10-15
Management presentations
Depending on the number and
quality of first round bids, potentially
add an intermediate round
Detailed due diligence
Weeks 15-23
Page 18
Neg
gotiations
FINAL BID
„ Purchase agreement
negotiation
„ Buyer diligence
Contract
negotiations
BGSA Process:
Buy-side Steps
Event
Phase I
Strategic Confirmation (2 weeks)
2 weeks
• Confirm acquisition strategy details, e.g., targeted
geographies, service mix, management, technology, size
parameters
• Confirm acquisition timeline and process plan
Target Evaluation (6 weeks)
Phase II
• Identify appropriate targets based on geography, strategic fit,
size parameters, operating performance, management team
and willingness to sell
6 weeks
4 weeks
ee s
• Develop database of contacts and cursory information
• Narrow list to select potential acquisition targets
4 weeks
Initial Discussions (6 weeks)
2 weeks
• Initial due diligence and management discussions
• Narrow list to a handful of targets in each selected
geography
6 weeks
Phase III
Execution (10 – 20 weeks)
• Select
S l t few
f
buyers
b
to
t pursue acquisitions
i iti
• Negotiate definitive agreement
9-15 weeks
• Regulatory approvals (if necessary)
• Closing
Weeks
Page 19
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Contact Information
Contact us:
Benjamin Gordon
Managing Director
BG Strategic
St t i Advisors
Ad i
(561) 932-1600, x1601
[email protected]
www.BGSA.com
Page 20