In a sign that much in the logistics world is driven by China, YRC announced today that it had entered into a definitive agreement to purchase Shanghai Jiayu Logistics Co, Ltd.According to YRC, Shanhai Jiayu is one of the largest providers of LTL ground transport in China. They have in excess of 1,800 employees and 3,000 vehicles. YRC will pay between $29.5 million and $43 million for a 65% stake in the acquired company.

 

YRC is clearly making a play to continue growth on an international level. By filling out their portfolio abroad, YRC is able to offer a wider range of services to their existing customer base.

 

So what take-aways are there for a small company owner?

• Synergies exist for larger companies internationally- What About Smaller Targets?
• Valuations overseas can be attractive if you have the wherewithal to complete the transaction.
• Expect transaction timeframes to be significantly extended and potentially require regulatory approval.
• Larger players continue to seek overseas integration in order to facilitate growth.

To be certain, we expect to see more acquisitions in similar fashion in the next 12-18 months.

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