Logistics and supply chain services firm Menlo Worldwide, a subsidiary of Con-way Trucking (CNW), announced Monday that it will buy China-based Chic Holdings Ltd. in an ongoing effort to expand its Asian market presence.
San Mateo-based Menlo will pay $60 million in cash plus undisclosed earn-out incentives based on future performance for the purchase, according to spokeswoman Jayme Kunz.
The announcement comes just a week after Menlo Worldwide closed another deal for the purchase of Cougar Holdings Pte Ltd., a leading Southeast Asia freight, warehousing and logistics management company with operations in Singapore, Malaysia and Thailand. Parent company Con-way, a $4.7 billion freight transportation and logistics company, also completed the $750 million acquisition of Joplin, Mo.-based Contract Freighters Inc. in August, bringing total acquisitions since June to nearly $1 billion.
Combined, Menlo and Chic will have more than 1,500 employees in China operating from 139 sites in 79 cities, with nearly 180,000 square meters of warehouse space. Menlo’s China operations will be based at Chic Logistics’ headquarters in Shanghai, Kunz said.
Menlo Worldwide President Robert Bianco Jr. called the purchase the “most strategic acquisition” in the company’s 16-year history. “With Chic Logistics’ domestic capabilities and network, we immediately become a major player in the intra-China market — the next great growth engine for transportation and logistics,” Bianco said.
Chic’s purchase, which has already been approved by both companies’ governing boards, will allow for faster growth in China, Con-way Trucking CEO Doug Stotler said.
One of China’s fastest-growing third-party logistics firms, Chic produced revenues of $55.2 million in 2006, a 40 percent increase over 2005, Kunz said.
Expected to close in the fourth quarter, the deal will allow Menlo to manage clients’ supply chains from China to the United States and vice-versa, Kunz said.
Unrelated to the purchase, Con-way has been named as one of 15 finalists for the “Freedom Award.” The U.S. Department of Defense award, to be presented Wednesday in Washington, D.C., recognizes Con-way’s ongoing support for National Guard andReserve soldiers, Con-way Communications Director Gary Frantz said.
Con-way and its subsidiaries count 92 employees now serving as part of the war effort. Each quarter the company sends about 2,500 pounds of food, clothing and other employee-donated supplies to soldiers overseas, Frantz said.