Menlo Worldwide, the global logistics subsidiary of Con-way Inc., announced today, Oct. 18, that it had completed the acquisition of Shanghai-based Chic Holdings Ltd., a corporation registered in the Cayman Islands, and its wholly owned subsidiaries Shanghai Chic Logistics Co. Ltd. and Shanghai Chic Supply Chain Management Co. Ltd. Under the transaction, Menlo acquired Chic Holdings and all of its assets and subsidiaries for $60 million, plus future undisclosed earn-out incentives based on performance.
Menlo says the acquisition of Chic Logistics, which had $55.2 million in revenues for 2006, dramatically expands its operating footprint and service capabilities in China. Menlo says it gains an established logistics network with more than 1,500 employees working from 130 operating sites in 78 cities, providing a wide range of domestic third-party warehousing, logistics and transportation management services throughout the country.
“We’re very pleased to welcome Chic Logistics to Menlo and excited about the tremendous foundation for growth and market expansion this platform brings to us in China,” says Robert L. Bianco Jr., president of San Mateo, Calif.-based Menlo Worldwide. “The skilled work force and strong management of Chic Logistics are excellent resources with proven expertise in inland China transportation and logistics. Our customers are already inquiring about how they can leverage this acquisition to benefit their domestic China distribution needs as well as their global supply chain operations.”
“China’s domestic market continues to experience rapid growth, which leads to opportunities but also presents new challenges and complexities,” says Johnson Shen, chief executive officer of Chic Logistics. “Our customers, who have benefited from Chic Logistics’ excellent network and service throughout China, now will also have access to additional resources through the impressive global platform of Menlo. This acquisition provides great support for our employees and customers. We will be able to achieve faster growth in the domestic China market while expanding to offer our customers proven international coverage via Menlo’s global network.”
The Chic acquisition complements Menlo’s existing presence in China, where the company has had operations for nearly a decade. It was the second acquisition for Menlo in Asia this year; the company previously completed the purchase of Cougar Holdings Pte Ltd., a 3PL with operations in Singapore, Malaysia and Thailand. Menlo says the two acquisitions fulfill a strategic expansion plan that extends its Asia-Pacific network with complementary capabilities, while establishing a solid foothold for domestic distribution in China.
Integration activities are under way, as are sales initiatives to pursue business expansion opportunities with current customers as well as new projects for new clients. The acquisition was funded using existing cash resources and is expected to be accretive to the earnings of Con-way Inc. beginning in 2008.