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DSV Panalpina buys Agility’s logistics unit for $4.1B

Deal creates third-largest freight forwarder

DSV Panalpina now a top 3 forwarder by revenue (Photo: DSV Panalpina)

DSV Panalpina (DSV.C.DX) announced Tuesday it will acquire the logistics arm of Kuwait-based Agility Public Warehousing (AGLT.KW) for $4.1 billion (1.23 billion KWD). The deal will make it the third-largest freight forwarder globally.

Agility’s stand-alone Global Integrated Logistics (GIL) unit is expected to be acquired in an all-stock transaction during the third quarter. DSV plans to issue 19.3 million shares, approximately 8% of its outstanding stock, to fund the deal. The transaction places the value of GIL at 23.3x last 12 months enterprise value-to-adjusted operating income and 0.94x LTM EV-to-sales.

The combined entity is expected to generate $22 billion in revenue, moving 2.8 million ocean containers and 1.6 million airfreight tonnes annually with a workforce of more than 70,000 in 90 countries.

80% of GIL’s 2020 revenue was tied to air and ocean freight.


“Agility’s Global Integrated Logistics business and DSV are an excellent match, and we are proud that we can announce our agreement to unite,” said Jens Bjørn Andersen, Group CEO of DSV. “GIL’s global network, industry competencies and strong market position in APAC and the Middle East complement DSV’s network well and will support our long-term value creation ambitions.”

GIL adds more than 1.4 million square meters of additional warehouse capacity to DSV’s network in the Middle East and Asia, bolstering its contract logistics offering. GIL also brings road freight capabilities in Europe and the Middle East.

“This deal creates significant shareholder value and marks a new milestone in Agility’s journey. Agility remains committed to the supply chain industry and will become the second-largest shareholder in one of the fastest-growing and most profitable logistics companies in the world,” said Tarek Sultan, Agility’s vice chairman, in a separate press release.

DSV has grown to its current position through acquisition. The Danish transport and logistics company acquired Panalpina in a deal that exceeded $5 billion in 2019.


DSV said the GIL acquisition will raise its revenue by 23%, leaving it behind only two forwarders, DHL Logistics (DXE: DPW) and Kuehne & Nagel (KNIN.Z.IX).

The deal is expected to be accretive to earnings in year two. The company plans to provide more color on synergies and integration costs following the close of the transaction.

Sultan said Agility will focus on its remaining operations — logistics parks, the Shipa companies and technology ventures — post the close. In addition to being the second-largest shareholder in DSV, Agility will be able to designate one director to DSV’s board.

Earnings ahead of expectations, guidance raised

In a separate release, DSV reported that first-quarter revenue grew by 28% year-over-year on a constant-currency basis as air and ocean revenue climbed 46%. Operating income doubled, with “good performance in all business areas” being reported.

The company raised its full-year operating income forecast by 6% on the better-than-expected first-quarter result.

“The markets in air and sea are characterized by strong demand and tight capacity, and it takes an extraordinary effort by our staff to find good solutions for our customers under these challenging market conditions,” Andersen added.

Shares of Agility were up 10% in overseas trading Tuesday. DSV’s shares increased more than 6% on the day.

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Todd Maiden

Based in Richmond, VA, Todd is the finance editor at FreightWaves. Prior to joining FreightWaves, he covered the TLs, LTLs, railroads and brokers for RBC Capital Markets and BB&T Capital Markets. Todd began his career in banking and finance before moving over to transportation equity research where he provided stock recommendations for publicly traded transportation companies.