C.H. Robinson swoops on Milgram as forwarder M&A activity continues

Freight forwarder C.H. Robinson has expanded its network in Canada through the purchase of Milgram & Company for $50m in cash.
Montreal-headquartered Milgram provides freight forwarding, customs brokerage, surface transportation and warehousing in Canada to 3,500 active customers. The company employees 330 people and has six offices in Canada and a single office in the US.
C.H. Robinson chairman and chief executive John Wiehoff said the move was part of the company’s continued global expansion.
“Today, we are bringing one of Canada’s most respected forwarding companies into C.H. Robinson,” he said.
“This acquisition continues our global expansion and marks our third Global Forwarding acquisition in the past five years.
"We are extremely proud of the progress we have made in bringing these companies into C.H. Robinson, and Milgram provides another unique opportunity to strengthen our global forwarding and customs brokerage offerings in Canada.
"We look forward to working with Milgram’s customers to offer our full suite of logistics services to help improve their supply chains.”
The acquisition is expected to be approximately neutral to earnings in 2017 and slightly accretive in 2018 and will be financed through cash and funds drawn from C.H. Robinson’s existing revolving credit facility.
Milgram president and chief executive Jay Goldman said: "We are excited to build on our success providing supply chain expertise and execution, refining processes, and being an integral part of our customers’ businesses.
“We now look forward to collaborating with C.H. Robinson to grow our presence and provide our customers with the opportunity to leverage C.H. Robinson’s worldwide network and world-class service offerings.”
Last year the company purchased Australian forwarder APC Logistics.
The continued consolidation of the freight forwarding market was recently predicted by analysts at investment bank Jefferies International.
They reasoned that a growing performance divide in the freight forwarding sector, due to differences in customer and product mix and the effectiveness of IT systems would lead to further acquisitions.
With both DSV and XPO Logistics recently expressing an interest in buying competitors, which would further consolidate the fragmented freight forwarding sector, other companies could find themselves takeover targets, said the analysts.
Several major forwarding and logistics deals have gone through in recent years, with DSV buying UTi, XPO purchasing Norbert Dentressangle and Con-Way, Japan Post buying Toll, Gefco purchased IJS Global, Geodis went for OHL, Kuehne+Nagel moved on ReTrans and Panalpina have made sector specific purchases.
XPO has already signaled its intent to make further acquisitions.
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