Warburg Pincus shells out $255 million for broker BlueGrace Logistics

As a principal funding source behind contract logistics firm New Breed Logistics, freight broker Coyote Logistics LLC, technology firm GT Nexus, and transportation management systems provider MercuryGate International Inc., Warburg Pincus LLC is one of the sharpest and more seasoned tools in the supply chain private equity shed.

So New York-based Warburg must have seen something in BlueGrace Logistics LLC, a seven-year-old freight broker and enterprise solutions provider based in Riverview, Fla., to shell out $255 million for a stake in the company. Warburg Pincus said it would use the funds to make a "minority investment of growth capital" in Blue Grace, and to give the broker some dry powder for future acquisitions.

The investment, announced today, is considered a sizable commitment to a company like BlueGrace, which operates out of 60 company-owned and franchised locations in the U.S. It is a validation of the efforts and persona of Bobby Harris, the company's 42-year-old founder, president, and CEO. BlueGrace was an early and all-in adopter of technology, especially in the hidebound LTL space. That quality made it attractive to a company like Warburg Pincus.

In a statement, Warburg Pincus Managing Director Alex Berzofsky said the company "has been a long-term investor in the technology-enabled logistics market, and BlueGrace is a rapidly growing innovator in that industry."

Harris, 42, is also considered one of the brokerage community's most dynamic players, a factor that endeared Blue Grace to Warburg Pincus. "They invest in the CEO," said Jett McCandless, co-founder and CEO of project44, a Chicago-based logistics IT firm. "And now they think Bobby is the best CEO to bet on."

According to McCandless, Warburg Pincus thinks BlueGrace could become the next Coyote, which was founded by Jeff Silver, another high-profile brokerage executive. Atlanta-based UPS Inc. bought Chicago-based Coyote in July 2015 for $1.8 billion, the largest acquisition in UPS' history.

BlueGrace is presently building out the remainder of its 55,000-square-foot headquarters facility and is scouting for more space in the Tampa Bay market.

BlueGrace said it expects to significantly increase employment in Tampa, Chicago, Boston, and other markets. The company, which currently has 370 employees, expects that number to surpass 1,000 during the next several years through a combination of organic expansion and acquisitions.