M&A News: 5 Deals of the Week (May 4)
Top-5 deals this week by size (<$50 million, $50-$100 million, $100-$500 million, $500 million - $1 billion and >$1 billion)
I am always scanning the news for interesting M&A announcements. Business and commerce never sleep, and deals are always happening. Here is a snapshot of what caught my attention this week.
Deal size >$1 billion:
DSV, a world leading Danish transport and logistics company, completed its acquisition of DB Schenker in a $16.3 billion all-cash transaction. DB Schenker was among the largest freight forwarding companies in the world, and this acquisition dramatically increases the scale of DSV’s global logistics and transport capabilities. The deal terms correspond to 0.75x EV/Sales and 13.0x EV/EBIT paid by DSV. With the transaction now completed, DSV is aiming for significant post-merger improvements in their newly acquired operations. They aim to bring DB Schenker’s operating margins in line with DSV’s by 2028.
“With the completion of the acquisition of Schenker, we have reached a milestone in the history of DSV. We have been looking forward to completing the transaction and I am excited to welcome our new colleagues to the DSV organisation. With this acquisition, we become a world-leading player in global transport and logistics, at a time where global supply chains are more in focus than ever before, and our customers need a reliable and agile global network of services and products. By combining the two companies we will create a unique flexible platform for long-term financial growth to the benefit of our customers, employees, shareholders and other stakeholders.” - Jens H. Lund, Group CEO of DSV
Deal size $500 million to $1 billion:
nVent, UK based global leader in electrical connection and protection solutions, completed its acquisition of US based Avail Infrastructure Solutions for $975 million. Avail manufactured Bus Systems, Enclosure Systems, Switchgear Systems and Critical Power Solutions - all required for electrical transmission systems. The Avail portfolio will now become part of nVent’s Electrical Products Group and expands this group’s portfolio reach into higher growth markets.
“With electrical demand increasing steadily over the next several decades, the need for safe and resilient grid solutions is accelerating. This acquisition strengthens nVent’s portfolio in the high-growth infrastructure vertical.” - Beth Wozniak, CEO of nVent
Deal size $100 million - $500 million:
Tenaz Energy, a Canada based E&P company acquired NAM Offshore for $323 million. NAM Offshore is a Dutch energy production asset owned by a joint venture between Shell PLC and ExxonMobil Corp. With this acquisition, Tenaz acquired assets producing 10,000 boe/day of natural gas (forecast for 2025). Tenaz will invest an additional $55-$61 million into the acquired asset in 2025 to fund additional drilling and workover activities, with production benefits expected in 2026.
Tenaz Energy’s strategy is to leverage their commercial production and M&A capabilities to build a leading intermediate size E&P. Going forward, they will continue to acquire conventional and semi-conventional production assets in overseas markets. I’ll be scanning for more deals from them in the future.
Deal size $50 million - $100 million:
Kameda Seika, Japan’s largest manufacturer of rice crackers has sold its Mary’s Gone Crackers subsidiary for $60.7 million to Rosseau, a subsidiary of Canada based Dare Foods. The deal is a Debt-to-Equity Swap (DES) arrangement. $60.7 million of loans made to Kameda Seika’s consolidated USA subsidiary was converted to shares (100% of the shares of Mary’s Gone Crackers) which were then transferred to Rosseau. Kameda Seika acquired Mary’s Gone Crackers in 2013, but the business has struggled in recent years due to higher raw material prices and “other factors”, which led to the sale.
Deal size <$50 million:
This week’s deal <$50 million seemed a bit strange to me, so it made the list for that reason alone. Chijet Motor Company, a Chinese EV manufacturer acquired 80% of a company called TooExpress based in the United States for $40 million. Earlier this year, Chijet received a delisting warning from Nasdaq (their market cap dropped below the $50 million requirement) so I would have thought this was a bad time to acquire a new business. And the business they acquired? Well, according to TooExpress’ website, they provide drone-based last-mile-delivery solutions. But their website is extremely light on detail. The “Service” sections claims to be a market leader in end-to-end logistics solutions, but no customers or partners are listed. The other sections of the website are “Vision” and “Research & Technology”, both of which are very high level. Even better, Chijet (the acquirer) made this acquisition in a $40 million all-stock transaction (valuing TooExpress at $50 million). But the entire market capitalization of Chijet is only $50 million (at time of writing). No press release was made by Chijet, just the required SEC filing. I don’t know the logic behing a Chinese EV manufacturer acquiring a US-based drone-tech company focused on last-mile delivery that seems to only have an idea and no actual product. Perhaps this is a way to transfer $40 million of Chinese shares to a US-based legal entity? At any rate, this one seemed strange to me. I’d be curious if any readers know more about this deal.