GEODIS inks agreement to acquire Keppel Logistics

Levallois-Perret, France-based global third-party logistics (3PL) and freight transportation services provider GEODIS said this week it has inked a binding agreement to acquire Keppel Logistics, a Singapore-based contract logistics services provider.

Financial terms were not disclosed, but various media reports said that the purchase price was $80 million. GEODIS officials said that the acquisition is subject to regulatory review and approvals, which are expected to be obtained by the end of the second quarter. They added that GEODIS and Keppel will operate as independent businesses and run their business as usual in the interim period.

Keppel has nearly 500 employees and has a strong presence throughout Southeast Asia, according to GEODIS, ranking in the top five, for Singapore-based contract logistics services providers. It owns more than 200,000 square-feet of warehouse space in Singapore, Malaysia and Australia. Its service portfolio is comprised of end-to-end B2B and B2C logistics solutions, from warehousing to last mile delivery, with strong skills in e-commerce omnichannel service offerings, driven by its fast-growing UrbanFox platform.

GEODIS said that this acquisition will significantly increase the company’s contract logistics footprint and e-commerce fulfillment services in Singapore and Southeast Asia. And it added that it represents a major step in its strategic roadmap for the Asia Pacific region, where it currently employs 3,700 people across more than 76 sites. It also noted that the acquisition will reinforce GEODIS as a leading logistics service provider, further expanding its footprint by adding to recent investments in contract logistics sites in India, South Korea and Australia.

“As one of the leading logistics providers, we are continuously looking for ways to evolve the region’s supply chain and our clients’ [e-commerce] ecosystem,” said Onno Boots, President and CEO of GEODIS Asia-Pacific, in a statement. “The acquisition will strengthen our contract logistics and digital omnichannel capabilities, elevate our end-to-end logistics solutions and bring greater value to customers across the region. By enhancing our eCommerce services, we will provide brands with the ability to scale their online presence seamlessly and effectively navigate supply chain challenges to accelerate their growth in this region.”

And Thomas Pang, CEO of Keppel Telecommunications & Transportation said in the same statement that for more than 50 years, Keppel Logistics has been providing customized integrated logistics in Singapore.

“We believe the integration of Keppel Logistics as part of GEODIS will help accelerate Keppel Logistics’ growth, allowing it to scale up and provide even better value propositions to both its customers and internal stakeholders,” said Pang.

Evan Armstrong, president of Milwaukee-based supply chain consultancy Armstrong & Associates, told LM that this acquisition adds to Geodis’ network in Southeast Asia and more specifically Singapore.

“It includes Keppel Logistics’ businesses in Singapore, Malaysia, and Australia, as well as UrbanFox which is an e-commerce fulfillment provider with a contracted last-mile delivery driver network in Singapore, Malaysia, and Vietnam,” he said. “This divesture is part of Keppel Telecommunications & Transportation’s long-term (2030) plan to exit third-party logistics. For FY 2021, the Keppel Logistics entities being divested to GEODIS registered a net loss after tax of $5.2 million. The Geodis transaction will not include Keppel’s logistics operations in China, which include: the Jilin Food Zone Logistics Park, the Tianjin Eco-City Distribution Centre, and the Keppel Wanjiang International Coldchain Logistics Park. It also does not include Keppel’s stakes in Keppel Puninar Logistics in Indonesia and Indo-Trans Keppel Logistics in Vietnam. Keppel Logistics has signed a non-binding term sheet to divest its 51% interest in Indo-Trans Keppel Logistics in Vietnam to In Do Trans Logistics Corporation, its existing joint venture partner. In 2019 Keppel divested its Foshan and Hong Kong operations.”

Ben Gordon, Managing Partner of Cambridge Capital, an investor in niche supply chain leaders, and also Managing Partner of BGSA Holdings, a leading mergers and acquisitions advisory firm focused on the transportation, logistics, and supply chain technology sector, said that the Geodis acquisition of Keppel illustrates continued global convergence in logistics M&A. 

“Geodis, France’s largest logistics provider and a European powerhouse, is strengthening its position in Asia with the purchase of Singapore-based Keppel,” he said. “I expect we will see more global convergence this year.”