Three deals in the past week have put the name of private equity firm The Jordan Co. on the lips of many folks in the transport and logistics field.
In the past 24 hours, Jordan acquired freight brokerage Load Delivered Logistics and logistics IT provider Logistical Labs, both based in Chicago. The two companies were acquired for a combined $100 million, according to one source. Last week, Jordan acquired Phoenix-based broker GlobalTranz Enterprises for what two sources said was a $400 million price tag.
According to another source, the Load Delivered and Logistical Labs purchases were engineered by Capstone Logistics LLC, also owned by Jordan. Norcross, Ga.-based Capstone provides outsourced distribution center services to companies in the grocery, foodservice, retail industries, among other sectors. Load Delivered is Logistical Labs’ second-largest customer, according to an industry source.
Jordan, which was founded in 1982 and has offices in New York and Chicago, focuses on “mid-market” or mid-size companies. It is no stranger to the transport and logistics space. Besides Capstone, Jordan’s current portfolio includes international freight forwarder AFF Global Logistics, courier firm Quick International Courier; third-party logistics (3PL) provider Odyssey Logistics and Technology Corp.; Harvey Gulf, a vessel operator in the Gulf of Mexico; and VT Services, which provides logistics and engineering services to the Pentagon. It has in the past owned logistics firms that it eventually sold. Jordan officials did not immediately respond to a request for comment.
The spate of transactions is more evidence that the fragmented brokerage and logistics IT segments—populated with profitable, well-run companies that may lack the capital to reach beyond their current plateaus—are fertile ground for cash-rich private equity firms. These firms will hold their acquisitions for at least 3 to 5 years and often longer, and in some cases will integrate them with other portfolio acquisitions to leverage each other’s capabilities.
The digitalization of commerce, which has sparked a boom in deliveries as more consumers order online than from a physical store, has created significant interest in providers that understand how technology can best be deployed to facilitate these nascent supply chains. According to data from the St. Louis Federal Reserve, e-commerce currently accounts for 9.1 percent of all U.S. retail sales. That is seen as just scratching the surface, according to virtually every market observer.
Jordan’s acquisitions “reflect the high level of interest private equity is exhibiting in transportation and logistics,” Benjamin Gordon, head of BGSA Strategic Advisors, a transport and logistics mergers & acquisitions firm, said in an e-mail today. Gordon said he expects a “continued high level of investment activity” as strong growth trends persist in the supply chain management sector.