CEVA Logistics Acquires CMA CGM Log
CMA CGM is selling its freight management company CMA CGM Log for $105 million to the Swiss company CEVA Logistics. Recently CMA CGM has acquired a 30% stake in Ceva Logistic.
CEVA will remain an independent and standalone listed company. This strategic partnership is aligned with CMA CGM's strategy to offer end-to-end logistics solutions to its customers, pioneering the development of integrated logistics solutions, while retaining an arm's length business relationship with CEVA.
The deal is expected to close in the second quarter of 2019 pending regulatory approval.
A press release from the global logistics supply chain company in both freight management and contract logistics explained its revised strategic plan which includes three key levers to accelerate top-line growth and improve profitability: the launch of a strategic partnership with CMA CGM and the acceleration of turnaround efforts with the support of CMA CGM's corporate transformation expertise, the leveraging of the CMA CGM's overall platform to accelerate revenue growth, and the acquisition of CMA CGM's freight management activities (CMA CGM Log).
Xavier Urbain, CEO of CEVA Logistics said: "With the support of our strategic partner CMA CGM, I am proud to open a new chapter for CEVA Logistics and announce that we can accelerate our transformation and turnaround action plan in the next three years and beyond."
He added: "This can be achieved by a combination of our commercial and sales focus, cross selling with CMA CGM customers, our own productivity actions, the integration of CMA CGM Log within CEVA and sharing resources with CMA CGM in the field of procurement and administrative functions. I am very happy to welcome Nicolas who has successfully turned around the APL shipping company as my Deputy and COO."
The combination of CMA CGM's and CEVA's expertise in corporate transformations is expected to deliver faster and more sustainable efficiency, said the release.
Management expects that these three key initiatives will result in an incremental US$ 100 million of Adjusted EBITDA by 2021 compared to the objective set at the IPO. As a result, management expects an Adjusted EBITDA range of US$ 470 to 490 million by 2021. In terms of EBITDA margin, the objective remains to achieve more than 5% in the longer term when full benefits materialize.