www.harriswilliams.com Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is authorised and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business. TRANSPORTATION & LOGISTICS INDUSTRY UPDATE │ NOVEMBER 2016
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TRANSPORTATION & LOGISTICS · Inc. 10/19/2016* Logistics TVS Logistics Services Ltd. Provides third party logistics services in India. Caisse de depot et placement du Quebec 10/18/2016
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www.harriswilliams.com
Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is authorised andregulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business.
Jeffery PerkinsManaging Director [email protected]+49 (0) 69 3650638 00
TRANSPORTATION & LOGISTICS
INDUSTRY UPDATE │ NOVEMBER 2016
TRUCKING | SELF-DRIVING TRUCK DELIVERS
In what it called the world’s first shipment by a self-driving truck, technology firmOtto announced Oct. 25 that one of its heavy-duty, semi-autonomous trucksassisted in a 133-mile delivery for Anheuser- Busch InBev. Otto was founded inJanuary by former Google engineers and acquired in August by UberTechnologies Inc. With a professional driver on board Oct. 20, the Class 8 tractorand its trailer loaded with 51,744 cans of beer traveled south in Colorado from FortCollins to Colorado Springs — with 120 miles of the historic journey occurring withthe truck in full autonomous mode on Interstate 25.
Transport Topics
MARINE | SHIPPING INDUSTRY FEELS SHOCK WAVES FROM ELECTION
The election of Donald Trump is sending shock waves across the shipping industry,which fears the antitrade rhetoric that took center stage during the campaign willfurther hurt ship operators as they try to deal with the worst down-cycle in 30 years.“There is little detail about Trump’s trade policy, but his overall protectionist, anti-globalization stance will likely hurt shipping—an industry that thrives on low tradingbarriers for goods,” said Basil Karatzas, a New York-based maritime ad adviser whoworks with the industry’s biggest names. “In the short term, the shock effect to themarkets will likely lead to lower trading volumes at a time when shippingcompanies report earnings in bright red numbers.”
Wall Street Journal
AIR | GLOBAL AIR CARGO STRONGEST SINCE US WEST COAST PORT CRISIS
Global air cargo traffic rose 6.6 percent year-over-year in September, the fastestgrowth rate since the industry benefited from the disruption caused by the US WestCoast ports strike in February 2015, the International Air Transportation Associationsaid. The rebound, which coincided with an apparent upturn in new export ordersin recent months, may also have been driven by some “unique” factors, includingthe rush replacement of Samsung Galaxy Note 7 devices and the early impactfrom the collapse of Hanjin Shipping at the end of August, according to theindustry body.
Journal of Commerce
RAIL | U.S. WEEKLY RAIL TRAFFIC INCREASES FOR FIRST TIME IN MONTHS
The Association of American Railroads (AAR) reported on November 9 that U.S. railtraffic for the week ending November 5, 2016 was 543,377 carloads andintermodal units, up 0.7% compared with the same week last year. Total carloadsfor the week ending November 5 were 271,262 carloads, down 0.4% comparedwith the same week in 2015, while U.S. weekly intermodal volume was 272,115containers and trailers, up 1.7% compared to 2015. Four of the 10 carloadcommodity groups posted an increase compared with the same week in 2015.
RailwayAge
LOGISTICS | MAJOR CARRIERS FORECAST GROWTH IN HOLIDAY VOLUMES
UPS, FedEx and the U.S. Postal Service are all projecting major growth in holidayshipping volume during the peak season, driven by the continued boom inecommerce activity. UPS, for example, is projecting 700 million deliveries betweenThanksgiving and the end of the year, a 14% increase over 2015. This year has twoextra shipping days, which contributes a few percentage points to the increase.UPS includes the last week of the year in its holiday forecasts because of thegrowth of returns, gift card activation and inventory replenishment during thisperiod.
Provides transportation, freight, and warehousing serv ices. Kerry Logistics Network
Ltd.
M&A TRANSACTIONS
2
RECENT M&A TRANSACTIONS1,2
TRANSPORTATION & LOGISTICS
*Denotes minority investment
INDUSTRY UPDATE │ NOVEMBER 2016
PAGE |
(8.2%)
(5.4%)
(3.3%)
(0.9%)
9.7%
Rail & Rail Services
Marine
Transportation
Equipment
Trucking
Logistics Providers
1.9%
3.4%
4.7%
5.3%
7.2%
Marine
Transportation
Equipment
Logistics Providers
Trucking
Rail & Rail Services
5.7x
6.5x
8.8x
10.1x
10.5x
Transportation
Equipment
Trucking
Marine
Rail & Rail Services
Logistics Providers
5.9x
6.5x
8.0x
8.8x
10.0x
Transportation
Equipment
Trucking
Marine
Logistics Providers
Rail & Rail Services
(8.4%)
(7.3%)
(1.7%)
0.5%
4.5%
Rail & Rail Services
Marine
Transportation
Equipment
Trucking
Logistics Providers
(3.5%)
8.4%
14.5%
15.8%
17.0%
Marine
Logistics Providers
Rail & Rail Services
Trucking
Transportation
Equipment
PUBLIC MARKETS OVERVIEW
3
TRANSPORTATION & LOGISTICS
TEV / LTM EBITDA TEV / 2016E EBITDA
AVERAGE REVENUE GROWTH (2012 – 2015) AVERAGE REVENUE GROWTH (2015 – 2017P)
AVERAGE EBITDA GROWTH (2012 – 2015) AVERAGE EBITDA GROWTH (2015 – 2017P)
INDUSTRY UPDATE │ NOVEMBER 2016
PAGE |
(30%)
(25%)
(20%)
(15%)
(10%)
(5%)
0%
5%
10%
15%
20%
25%
Nov-15 Feb-16 May-16 Aug-16 Nov-16
Logistics Providers Trucking Rail and Rail Services
Marine Transportation Equipment S&P 500 Index
(27.5%)
4.8%
5.0%
5.7%
10.3%
10.5%
Marine
S&P 500
Rail & Rail Services
Trucking
Logistics Providers
Transportation Equipment
2.0%
4.9%
6.5%
9.2%
15.4%
19.8%
S&P 500
Transportation Equipment
Rail & Rail Services
Marine
Logistics Providers
Trucking
STOCK PRICE PERFORMANCE
4
TRANSPORTATION & LOGISTICS
(Indexed to November 18th, 2015)
TRAILING TWELVE MONTHS
MEDIAN % CHANGE (1 MONTH) MEDIAN % CHANGE (12 MONTH)
INDUSTRY UPDATE │ NOVEMBER 2016
PAGE |
OUR GROUP
Harris Williams & Co. is a leading advisor to the transportation and logistics M&A market. Our Transportation & LogisticsGroup serves companies in a broad range of attractive niches, including third-party logistics (3PL), truck, rail, marineand air transportation, transportation equipment, and the automotive and heavy duty vehicle market.
Harris Williams & Co. has a broad range of industry expertise, which creates powerful opportunities.Our clients benefit from our deep-sector experience, integrated industry intelligence andcollaboration across the firm, and our commitment to learning what makes them unique. For moreinformation, visit our website at www.harriswilliams.com/industries
Harris Williams & Co. (www.harriswilliams.com) is a preeminent middle market investment bank focused on the advisory needs of clients worldwide. The firm has deep industry knowledge, global transaction expertise, and an unwavering commitment to excellence. Harris Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements, and capital markets advisory services.
Investment banking services are provided by Harris Williams LLC, a registered broker-dealer and member of FINRA and SIPC, and Harris Williams & Co. Ltd, which is authorised and regulated by the Financial Conduct Authority. Harris Williams & Co. is a trade name under which Harris Williams LLC and Harris Williams & Co. Ltd conduct business.
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