TNT NV set to sell logistics business
Published by Florida Times-Union on December 7, 2005.
TNT NV is looking to sell its logistics business, including its North American unit, which is based in Jacksonville.
The Netherlands-based company announced the sale Tuesday during a news conference in Amsterdam. It said it had signed up Goldman Sachs Group Inc. to handle the sale and that it would also be buying back $1.2 billion worth of shares.
TNT runs the Dutch post office and also has an express-package division. It added the North American logistics operation in 2000 when it purchased CTI Logistx from Jacksonville-based CSX Corp., which was in the midst of refocusing attention on its rail business.
"It became evident to the board that we should focus on two of those three," said Dave Kulik, a board member as well as group managing director of the TNT Logistics division and president and chief executive officer of the North American operation. "We decided that logistics is a business that would do better in a different corporate environment."
The sale should not affect the 350 employees that TNT Logistics has in Jacksonville, Kulik said.
"It really is to the advantage of the new owner to keep these geographic operations intact," Kulik said, referring to the nine units that operate in different countries around the globe. "Our business is really driven by intellectual capital. The people are the real reason you would buy us."
Having a parent company more focused on logistics than TNT is might be good news for the employees in that unit, said David Campbell, an analyst with Thompson, Davis & Co. in Richmond, Va.
"Whoever acquires them will probably have strategic benefits from them," Campbell said.
Finding someone willing to shell out the money to buy the unit -- which, minus a small portion the parent company is keeping, had close to $4 billion in revenue last year -- might be difficult, said some who follow the logistics industry, particularly since several of the larger players have recently made acquisitions they are still digesting. Deutsche Bahn recently acquired BAX Global and DHL just acquired Exel.
"I'm not quite sure where that money's going to come from," said Evan Armstrong, president of Armstrong and Associates, a logistics industry consultant. "Unless somebody from outside the industry wants to get into the industry, you're left scratching your head."
One possibility, Armstrong said, is for the company to go out on its own, returning to its roots as an independent logistics company, as it was before CSX bought it.
"It's a strong company with good margins," he said. "It'll be a strong entity one way or another."