Stonepath Group, a provider of freight logistics services, said it is expanding into China with an agreement to acquire a majority interest in Shanghai-based logistics company Shaanxi Sunshine Express.
Stonepath will pay up to $11 million, consisting of at least $3.5 million in cash and $2.0 million in stock for a 55% interest in Shaanxi. The transaction is expected to close within 60-90 days. Once completed, the acquisition will help Stonepath expand into the greater China region where many of its clients have significant supplier relationships and where economic growth is driving demand for logistics services, company officials said.
Shaanxi reported revenues in excess of $50 million for 2002.
Stonepath's Chairman and CEO, Dennis Pelino, said, "Shaanxi is one of the strongest and best known logistics companies in Greater China, consistently ranked as one of the top 10 providers in the region. As an "A-Class" international forwarder with a strong executive team, we will be gaining a superb partner that will add an important geographic region to our international network and will provide a solid foundation for the growth of our company throughout Greater China."