Werner Companies (NASDAQ: WERN) sells its international freight forwarding segment, Werner Global Logistics, to a larger forwarding company, Scan Global Logistics Group.
The terms of the sale were not disclosed by Werner. However, Werner said the group generated $ 53 million in revenue in fiscal 2020. While figures for 2020 are not available for Werner’s larger logistics segment of which Global Logistics was part, the logistics group Werner had around 339 million dollars. of income over nine months.
SGL is a Danish company that has been in existence since 1975, according to the statement prepared by Werner on the sale. Its US operations are based in Seattle, and it has offices in 30 countries on six continents.
The sale of the unit comes with an agreement between Werner and SGL whereby the Danish company will offer its services to Werner’s customers, and SGL will turn to Werner to provide truck loading services in North America. .
“WGL customers will benefit from SGL’s extensive network of more than 115 sites across the globe, for their modern transportation management technology, global multi-channel service offerings and SGL’s ability to deliver local and international solutions in new trade routes across the Asia Pacific, Europe, Middle Eastern and Latin American markets, ”Werner said in his statement announcing the sale.
John Steele, chief financial officer and executive vice president of Werner, said the relatively small size of the unit – around 2% of Werner’s total revenue – and its relatively small reach compared to SGL’s meant that Global Logistics was better off with a bigger partner. “It probably makes more sense for SGL to buy our operations and we will focus on what we do best in North America as opposed to the ocean and the air,” Steele said during a telephone interview with FreightWaves.
Steele said that Werner Global Logistics staff will have the opportunity to join SGL. The number of Werner Global Logistics employees was not immediately available.
The deal is small enough that Werner said the divestiture would only result in a gain of 1 cent per diluted share. By the third quarter, Werner had diluted earnings per share by 67 cents.
In the statement prepared by Werner, CEO Derek Leather reportedly said the company “remains committed to our North American logistics capabilities in truck brokerage, freight management, intermodal and last mile services.”
Scan is part of the group of companies owned by SGLT Holding. Its global reach is extensive; for example, in its 2019 annual report released last year, it touted the opening of new offices in Peru and Myanmar.
In 2019, it reported sales of DKK 4.14 billion, which at current exchange rates translates to around US $ 675 million.
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Via: www.freightwaves.com
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