Package delivery company UPS has agreed to acquire global freight forwarded Menlo Worldwide Forwarding Inc., a subsidiary of CNF, for $150 million in cash and the assumption of approximately $110 million in long-term debt.
Menlo provides a full suite of heavy air freight forwarding services, ocean services and international trade management, including customs brokerage. It had $1.9 billion in gross revenues in 2003.
The acquisition reinforces UPS’s strategy of providing broad supply chain solutions to enable global commerce. As a result of the acquisition, UPS will expand its global capabilities and add guaranteed heavy air freight services around the world, enabling customers to reach the global marketplace faster. This also means UPS will introduce new time-definite products such as overnight, two-day and deferred heavy air freight in North America.
The acquisition is a strategic and operational fit, according to Bob Stoffel, UPS senior vice president, Supply Chain Group. Menlo’s international trade capabilities will complement UPS’s existing operations, Stoffel says.
Menlo Worldwide Forwarding currently operates in more than 175 countries and territories in the world. Menlo’s customers are in a broad range of industries, including pharmaceuticals, apparel, high tech/electronics, government, consumer goods and retail.
UPS expects to complete the transaction during the fourth quarter of 2004. The transaction is subject to customary closing conditions. The transaction is expected to be slightly accretive to earnings in 2005.
W. Keith Kennedy, CNF chairman and interim CEO, says: “The divestiture serves the best interests of our shareholders while enabling Menlo Worldwide Forwarding to join with one of the premier brands in the transportation industry.”
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