Global logistics services provider Deutsche Post DHL Group (DPDHL) said this week it has inked an agreement to acquire Mainz, Germany-based global ocean freight forwarding services provider J.F. Hillebrand Group and its related subsidiaries for roughly $1.5 billion (EUR).
Established in 1844, J.F. Hillebrand is a global service provider, focusing on ocean freight forwarding, transport, and logistics for beverages, non-hazardous, bulk liquids, and other products requiring special care. DHL said that over the last 12 months, J.F. Hillebrand generated revenue of around $1.4 billion (EUR), will ship roughly 500,00 TEU (Twenty-Foot Equivalent Units) in 2021, and has more than 2,700 global employees. DHL said that this transaction is subject to merger control clearance in certain jurisdictions, inter alia the EU and the U.S., with clearances expected in the coming months. DPDHL intends to fund the acquisition with available cash.
DPDHL added that this marks the company’s largest acquisition going back to 2005, when it acquired global air freight, ocean freight and contract logistics services provider Exel, which was subsequently renamed as DHL Supply Chain. And it added that the strategic combination of J.F. Hillebrand with DHLs Global Forwarding, Freight division will augment its dynamic ocean freight forwarding presence, explaining that a focus on core logistics is a big component of its Group Strategy 2025 efforts.
“With the growing maturity of our freight forwarding business, this bolt-on acquisition of Hillebrand is highly complementary to our existing portfolio,” said Frank Appel, CEO Deutsche Post DHL Group, in a statement “In line with our Group Strategy, we strengthen our core logistics business and deliver profitable long-term growth. Using our financial strength, we are able to pursue quality investments while reinforcing our unchanged commitment to deliver on investor return expectations.”
Tim Scharwath, CEO, DHL Global Forwarding, told LM there were various drivers that factored into this acquisition.
“While we’re unable to provide any details of the negotiations with Hillebrand, we can confirm that the growth and strong performance of our DHL Global Forwarding in recent years has prompted us to review bolt-on acquisition opportunities that could further strengthen our market position,” he said. “Hillenbrand proved a great fit and will generate healthy margins in a fast-growing business. It is a global service provider specialized in ocean freight forwarding, transport, logistics and supply chain management of beverages, non-hazardous bulk liquids and other products that require special care. It has a truly global footprint with a presence in over 90 countries and more than 2,700 employees covering major world trade lanes. For DHL, it offers attractive exposure to the fast-growing bulk liquid and adjacent commodities markets. Additionally, it will add substantial ocean freight volumes to our network, which will strengthen our market position and provide scope to optimize procurement.”
As for what bringing J.F. Hillebrand into the fold means for DHL’s customers, Scharwath explained that Hillebrand has an offering that is highly complementary to the DHL Global Forwarding business.
“It provides specialized capabilities that will enhance our portfolio and provide our customers, particularly in the alcoholic beverage, food and bulk liquid segments, with additional value-added services,” he said. “It will provide access to flexitanks (used in the transportation of liquids) in the market, which our team evaluates as the highest quality in the market. Importantly, Hillebrand has a best-in-class IT platform which will be a good fit with our myDHLi suite of tools and our overall digitalization agenda, which is focused on simplifying and optimizing our customers’ shipping processes.”
When asked to identify the biggest competitive advantages of this deal from a DPDHL perspective, Scharwath observed that the acquisition strengthens its position in the ocean freight market and also in the specialized bulk liquid segment and adjacent areas such as liquid food and pharmaceuticals, which are on a positive growth trajectory.
“DHL Global Forwarding already has a strong presence in specialized alcohol delivery, for example, with its Gori wine and spirits business,” he said. “Hillebrand will add services that DHL Global Forwarding / Gori today do not have and increase volumes on several trade lanes. The footprints of the companies are complementary, which will open up new opportunities and unlock value for customers of both companies while creating topline synergies from cross-selling.”
Cees van Gent, CEO and Chairman of the Executive Board J.F. Hillebrand Group, said in a statement that the paring of J.F. Hillebrand and DPDHL is a perfect match.
“Hillebrand is a leading ocean freight forwarder specialized in transport, logistics and supply chain management of beverages, non-hazardous bulk liquids and other products that require special care,” said van Gent. “Deutsche Post DHL Group is a major global logistics company—the two companies are a perfect match and we are pleased to announce our agreement to unite and form a future together. I am proud of what the Hillebrand teams in true collaboration with our loyal customers and vendors have built over our 177-year history and we now look forward to joining forces with Deutsche Post DHL Group.”
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