GXO Logistics announced Sept. 14 it has entered into a definitive agreement to acquire the high-end e-commerce order fulfillment platform PFSweb.
Irving, Texas-based PFSweb specializes in high-touch fulfillment in such verticals as luxury and health brands.
The acquisition price was set at an enterprise value of about $142 million.
GXO plans to acquire the company for $7.50 per share in cash, which comes to a $181 million equity value. The enterprise value of $142 million includes a cash balance of $39 million.
GXO Logistics ranks No. 6 on the Transport Topics Top 100 list of the largest logistics companies in North America.
Pelleissone
“We’ve got a long runway for growth in the United States, and the acquisition of PFS is a significant step as we continue to realize GXO’s full potential,” Eduardo Pelleissone, president of the Americas and Asia Pacific division, said of the company’s first acquisition of a company based in the United States.
Greenwich, Conn.-based GXO said in the announcement it has established lasting relationships through an array of solutions and services that improve the customer experience. L’Oréal USA, Champion, Pandora and the United States Mint are among its customers. Its services are supported by a network of 11 distribution centers across North America, Belgium and the United Kingdom. North America is the focus of 80% of its operations.
Oran
“It helps us acquire three unique capabilities,” GXO Chief Financial Officer Baris Oran said. “One is order orchestration [capturing, storing and electronically forwarding crucial information to clients for high-end brands]. Second is secure payment processing and fraud management services, and third, is customer care.”
Oran added that both companies share a similar approach.
“We love the company. We love the people that come from it,” Oran said. “We want to make sure it’s well-catered, well-managed. We will be keeping them within the company so that they don’t lose some of their capabilities in the high-end consumer experience. And we’ll expand that to some of our other customers.
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Investment bank Jefferies Group said it’s a good deal at a great price — the $142 million enterprise value represents seven times the midyear guidance for earnings before interest, taxes, depreciation and amortization.
Jefferies analyst Stephanie Moore wrote in a report: “We think the deal fits in exactly with GXO’s bolt-on M&A strategy to grow into attractive end-markets or verticals. High-level, we like PFSW’s expertise across the beauty and fashion categories, and think its value-add services create a unique … relationship for its customers.”
She also is optimistic about the compound annual growth rate.
“In terms of synergies, we would expect some incremental synergies coming from the elimination of duplicative public company costs, real estate consolidation and better vendor procurement terms.”
