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C.H. Robinson’s global forwarding unit reportedly eyed by DSV

Danish freight forwarder DSV has been reported to be interested in C.H. Robinson’s global forwarding unit.

Reuters reported Tuesday that a small group of investors, which recently met with DSV (DSV.C.DX), were told of the company’s interest in the segment and that the business could sell for as much as $9 billion.

C.H. Robinson’s (NASDAQ: CHRW) forwarding segment has significantly outperformed its freight brokerage business, which suffered during the pandemic as contract truckload rates struggled to catch up with a bustling spot market. High demand for ocean and air services as shippers wrestled with international capacity constraints, however, pushed pricing for forwarding services to new highs on the platform.

Forwarding revenue at C.H. Robinson more than doubled in 2021 to $6.7 billion. The unit reported an adjusted gross margin of 16% during the year with an operating margin nearly half that level. The unit booked revenue of $2.2 billion alone in the first quarter of 2022. Sizable increases in pricing as demand was robust and capacity was tight, along with market share gains, drove the top line higher.

The potential reported selling price implies the unit would go for a mid-teens multiple of trailing 12 months’ earnings before interest, taxes, depreciation and amortization.

The deal would give global transport and logistics giant DSV “critical access to trans-Pacific ocean trade lanes,” Reuters sources said. It would also significantly bolster its U.S. presence, which includes 1,700 employees in more than 40 offices.

DSV has made large acquisitions before. It acquired the logistics arm of Kuwait-based Agility Public Warehousing for $4.1 billion last year. In 2019, it announced it would acquire Swiss-based Panalpina in a more than $5 billion transaction.

A spokesperson from C.H. Robinson said the company “does not comment on rumors and speculation.” DSV hadn’t responded to a request for comment at the time of publication.

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