(Reuters) Private equity firm Warburg Pincus LLC is exploring a sale of New Breed Logistics Inc in a deal that could value the supply chain management company at more than $1 billion, according to people familiar with the matter. New Breed is the latest in a spate of private equity-owned logistics companies seeking new owners as the outlook for the U.S. economy gradually brightens, improving the chances that buyout firms can sell them at a higher valuation.
Warburg Pincus is working with investment bankers as it prepares to have talks with interested parties that are likely to include other private equity firms, the people said on Monday. New Breed s chief executive, Louis DeJoy , holds a substantial equity stake in the company and will likely play a key role in deal negotiations, some of the people added. The sources asked not be identified because the deliberations are confidential.
Representatives for New Breed and Warburg Pincus declined to comment. Founded in 1968 as a regional trucking company, High Point, North Carolina-based New Breed offers third-party logistics services to multinational corporations and government agencies. New Breed has more than 7,000 employees, operates more than 50 distribution facilities and annually distributes more than $30 billion in products, according to Warburg Pincus website.
New Breed s clients range from Siemens AG (SIEGn.DE) and Walt Disney Co (DIS.N) to the United States Postal Service and the U.S. Marine Corps. Warburg Pincus acquired a majority stake in New Breed in 2005 for an undisclosed amount from another private equity firm, Eos Partners .
New Breed joins a list of other private equity-owned logistics services providers that are exploring a sale, including Charter Brokerage LLC, Jacobson Companies Inc and Caterpillar Inc (CAT.N) -backed Neovia Logistics LLC. (Reporting by Greg Roumeliotis, Mike Stone and Soyoung Kim in New York; editing by Matthew Lewis) Photo courtesy of Shutterstock 1 References ^ Shutterstock (www.shutterstock.com)
peHUB Warburg Pincus said to mull New Breed Logistics sale …
(Reuters) Neovia Logistics LLC, a logistics services provider backed by industrial equipment conglomerate Caterpillar Inc , is exploring a sale that could value the company at more than $1 billion, according to people familiar with the matter. Neovia has enlisted investment bank UBS AG to run an auction for the company and is preparing to contact potential buyers, the people said, asking not to be named because the matter is not public. A sale of Neovia would come just two years after private equity firm Platinum Equity LLC acquired a 65 percent stake in the company from Caterpillar, leaving the industrial conglomerate with a 35 percent interest.
Platinum said at the time the overall transaction was worth about $750 million. Macquarie Group Ltd, which financed the deal, said on its website at the time that it represented the largest global logistics deal since 2008. Representatives for Neovia, Platinum Equity, Caterpillar and UBS did not respond to requests for comment.
Neovia runs a third-party logistics business that helps companies cut their distribution costs in sectors ranging from automotive and mining to electronics and healthcare. The Downers Grove, Illinois-based company has more than 90 facilities in 25 countries, according to Platinum Equity s website. Platinum Equity has lost no time taking cash out of the company since taking it over in August 2012, adding $125 million to its debt pile in February 2013 to fund a dividend.
Moody s Investors Service Inc said at the time it viewed the planned debt-funded dividend as an aggressive shareholder return initiative that removes capital from the company that could otherwise be used for growth or protection against a potential business downturn.
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peHUB Caterpillar-backed Neovia Logistics explores sale, say …