Maersk acquires US-based warehousing and distribution firm

AP Møller- Maersk has announced that it has reached an agreement to acquire Performance Team, a US-based warehousing and distribution company.

The Danish shipping giant aims to strengthen its capabilities as an integrated container logistics company, offering end-to-end supply chain solutions to its customers.

Performance Team is a family run business that began operations in 1987 in California, US. Today, the company operates 24 warehousing sites covering 800,000m² across strategic supply chain locations.

Maersk said Performance Team is a leader in North America warehousing and distribution, specialises in B2B and B2C distribution solutions within retail, wholesale and e-commerce with 24 warehousing sites. It has a track record of profitable growth of 17% per year for the last four years, and revenues of US$525 million in 2019.

Maersk said it is targeting the warehousing and distribution component to offer more supply chain options and flexibility to its ocean customers. The global size of the warehousing and distribution sector is estimated at more than US$200 billion and for North America it is US$50 billion.

There is a significant growth opportunity for third party warehousing and distribution players as only a small part of the warehousing and distribution sector in North America is currently outsourced and e-commerce is growing 12% annually, according to Maersk.

“We are especially excited to strengthen our e-commerce fulfillment capabilities since many of our retailers are looking to grow online retail sales in 2020 and beyond,” commented Narin Phol, regional MD of Maersk North America.

In North America, Maersk warehousing and distribution is based in South Gate, California and has a regional network of more than 20 facilities located in the US and Canada that offer warehouse and distribution solutions, including domestic consolidation, e-commerce fulfillment, inland drayage, facility and yard management and other value-added services.

The value of the transaction is US$545 million including IFRS 16 lease liabilities of around US$225 million. Performance Team 2019 EBITDA adjusted for IFRS 16 effects is estimated at US$90 million. The acquisition is subject to regulatory approvals and the transaction is expected to close 1 April 2020.

Profile of the combined entity:

[1] Transport Intelligence (2019), Global Contract Logistics

[2] Transport Intelligence (2019), Global e-commerce Logistics