Apollo’s Ceva Group To Buy EGL for $2 Billion
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Apollo Management LP, the buyout firm run by Leon Black, said its Ceva Group Plc will buy freight forwarder EGL Inc. for $2 billion, winning a takeover fight with the company’s founder.
EGL shareholders will get $47.50 a share, Ceva and Houston-based EGL said yesterday in a statement. The bid beat the $46.25-a-share offer from a group led by the chief executive officer, James Crane, his last proposal in a five-month effort to buy EGL.
An EGL-Ceva tie-up will create the world’s fourth-largest supply chain manager, Ceva said. Its combined revenue will be $7.9 billion. New York-based Apollo bought TNT NV’s logistics unit, which manages customers’s warehouses, for $1.9 billion in August and renamed it Ceva.
“A strategic buyer is always going to walk away as the winner because of the synergies they can create,” an analyst of Oscar Gruss & Son Inc. in New York, Justin Lumiere, said. “I’m sure it is hard for Mr. Crane. He put a lot of blood and sweat into this company.”
Mr. Crane wasn’t quoted in today’s statement, and a call to EGL spokesman Mike Slaughter wasn’t immediately returned.
Acquiring EGL will vault Ceva past Panalpina World Transport Holding of Switzerland among the world’s largest logistics companies, according to Satish Jindel of SJ Consulting Group in Pittsburgh. The three largest companies are Deutsche Post’s DHL International Ltd., Kuehne & Nagel International AG and DeutscheBahn AG’s Schenker & Co., Mr. Jindel said.
“This will allow Apollo to have an exit strategy sooner and at a higher multiple versus strictly being a contract logistics company,” Mr. Jindel said.
