Global logistics firm CEVA Group is buying Houston-based logistics provider EGL for $2 billion. The deal with CEVA terminates previous merger talks with an investment group led by EGL’s former chairman & CEO, James Crane. As a result, EHL is paying Crane’s group a $30-million merger cancellation fee, the company said.
CEVA Group, based in the Netherlands, is owned by private equity firm Apollo Management. It operates CEVA Logistics, formerly known as TNT Logistics, which it purchased in early 2006.
“Together, CEVA and EGL offer tremendous opportunities to better serve our global customer base and will provide enhanced solutions to meet businesses’ supply chain needs in a dynamic global environment,” said Josh Harris, a founding partner of Apollo Management.
“It increases the ability of both companies to serve existing customers,” added CEVA CEO Dave Kulik. “Maintaining the continuity of EGL's senior management team and its employees around the world is a priority and CEVA is committed to ensuring a smooth transition of ownership and continuing the strong relationships EGL has with its transportation partners.”
Kulik stressed that he expects all existing operations at EGL will remain unchanged following the merger and will be managed under a new freight management division, headquartered at EGL’s existing location in Houston.
The transaction is subject to regulatory approvals and the affirmative vote of the holders of a majority of EGL’s outstanding shares, but both EGL and CEVA anticipate the transaction will close in the third quarter.
Founded in 1984, Houston-based EGL, Inc. operates under the name EGL Eagle Global Logistics and booked revenues exceeding $3.2 billion in 2006. Its services include air and ocean freight forwarding, customs brokerage, local pickup & delivery service, materials management, warehousing, trade facilitation and procurement, integrated logistics and supply-chain management services.