A.P. Moller-Maersk, one of the world’s largest ocean freight carriers, has reached an agreement to acquire Performance Team, a U.S.-based warehousing and distribution company, for $545 million, including 16 lease liabilities of around $225 million.
The purchase strengthens Maersk’s capabilities as an integrated container logistics company, offering end-to-end supply chain solutions to its customers. As a leader in North America warehousing and distribution, Performance Team specializes in B2B and B2C distribution solutions within retail, wholesale and e-commerce, with 24 warehousing sites.
In North America, Maersk Warehousing & Distribution is based in South Gate, Calif., and has a regional network of 20-plus facilities strategically located in the United States and Canada that offer warehouse and distribution solutions, including domestic consolidation, e-commerce fulfillment, inland drayage, facility and yard management.
Combined, the two companies will have 46 North American warehouse and distribution sites covering 1.36 million square meters, with sales of $931 million. The acquisition is subject to regulatory approvals and the transaction is expected to close April 1. Performance Team has a track record of profitable growth of 17 percent per year for the past four years, with 2019 revenue of $525 million.
“With this acquisition, we invest in premium operational capabilities to significantly boost our existing warehousing and distribution offering,” Vincent Clerc, CEO of ocean and logistics at Maersk, said. “This will strengthen our ability to deliver products and solutions that meet our customers’ end-to-end supply chain needs.”
Maersk is targeting the warehousing and distribution component to offer more supply chain options and flexibility to its ocean customers. The global size of the warehousing and distribution sector is estimated at more than $200 billion and the North America segment stands at $50 billion.
Maersk said there is a significant growth opportunity for third-party warehousing and distribution players, as only a small part of the sector in North America is currently outsourced and e-commerce is growing 12 percent annually.
“We are going all the way for our customers, offering new ways to optimize their supply chains, grow their e-commerce business and find warehouses and distribution options,” Narin Phol, regional managing director of Maersk in North America, said. “Performance Team’s expertise, market reputation and scalability will create significant performance gains for our customers that grow and complement our existing Maersk warehousing and distribution product in North America. We are especially excited to strengthen our e-commerce fulfillment capabilities, since many of our retailers are looking to grow online retail sales in 2020 and beyond.”
Performance Team is a family-run business that began operations in 1987 in California. Today, the company operates 24 warehousing sites covering 800,000 square meters across strategic supply chain locations.
“Joining a global container logistics leader like A.P. Moller-Maersk is the ideal fit for Performance Team’s future growth, our customers and associates,” said Craig Kaplan, CEO of Performance Team, who will remain in the post after the transaction closes. “Maersk has a significant presence here in the U.S. They have a continuous improvement mindset like ours and together we can clearly deliver attractive logistics solutions that make our customers more competitive, while ensuring our employees grow with the business.”