The slowing economy has severely dampened mergers and acquisitions for U.S. transportation and logistics companies, according to a report by Pricewaterhouse-Coopers. “Intersections: Global Transportation & Logistics Mergers and Acquisitions Analysis for Q1 2008” said that global deal activity is not on track to match 2007 levels due to U.S. weakness, despite strong numbers in the rest of the world.
“Globally, the volume of transactions is on pace with the prior year, if you exclude the United States,” Kenneth H. Evans Jr., U.S. transportation and logistics sector leader at PricewaterhouseCoopers told Fleet Owner. “Because of the financial crisis, it may put a damper on future transactions. We thought the weakness of the dollar would make it easier, but uncertainty of the market results in worries about the value of U.S. companies. We were a little surprised by the decrease in activity.”
According to Pricewaterhouse-Coopers, the number of deals in the first quarter of 2008 is on pace to exceed both 2006 and 2007 levels in both number and value, but concern over an economic slowdown has most likely lowered the attractiveness of U.S. targets and made U.S. acquirers less likely to make deals.
“The strength of deals throughout the world, especially in Europe, is intriguing, because [merger and acquisition] values are still very good there, which is not a complete surprise,” Evans said. “Transportation and logistics are still consolidating and are still an interesting place for mergers and acquisitions to happen.”
Large deals — those with values above $1 billion — are still on pace to exceed 2006 and 2007 levels.
