Logistics M&A Outlook: A Turning Point in 2025?
The annual Benesch private equity in transportation conference has become a bellwether for the state of the logistics and transportation industry. This year’s event, held in December, brought together key players from private equity, venture capital, and general dealmaking to discuss the market for buying and selling logistics companies.
A Shift in Sentiment
After witnessing a spectacular collapse in the freight market, followed by a slow recovery, panelists at the conference expressed a sense of cautious optimism. Kristopher Hopkins, managing director and head of transportation and logistics banking at BMO Capital Markets, noted that private equity firms are sitting on a significant amount of dry powder, which they need to redeploy to realize investments. Jonathan Adams, managing director for transportation and logistics at Capstone Partners, described the sentiment among investors as “frustrated optimism,” with many eager to do deals and invest in companies that have made significant improvements.
Pent-up Capital and Realistic Valuations
The buildup of funds looking for opportunities, combined with companies that have invested in automation and improved their operations, could lead to a more active M&A market in 2025. However, Mark Fornasiero, managing partner of Clarendon Capital, cautioned that the market for merger and acquisition activity in logistics has been slow, and 2024 was a challenging year. Paul Martins, CEO of Ascent Global Logistics, emphasized the need for realistic valuations, warning against getting fixated on niche companies that sold for high multiples.
Freight Market Recovery
While some speakers were hopeful for a freight market rebound in 2025, others were more cautious. Brian Burke, chief commercial officer at Seko Logistics, noted that the tender rejection rate is increasing, but modestly. Jason Provonsha, CEO of Steam Logistics, expressed concerns about the impact of tariffs and the potential for a slow recovery.
Consolidation and Tariffs
Martins identified consolidation of brokerages as an area ripe for deals, citing the UPS sale of Coyote Logistics as an example. Burke noted that thousands of individual brokers have left the business in recent years. The introduction of tariffs in the first Trump term had a significant impact on the industry, and the possibility of new tariffs in 2025 is a major concern.
Uncertainties Ahead
The conference also touched on the potential for another port strike on the East and Gulf coasts in January, as well as the impact of a Trump administration on the industry. Fornasiero raised concerns about the pushback on the independent contractor model, which could lead to volatility in the short term.
Overall, the Benesch conference suggested that 2025 could be a turning point for the logistics and transportation industry, with pent-up capital and improved operations setting the stage for a more active M&A market. However, uncertainties around tariffs, port strikes, and political governance will continue to influence the industry’s trajectory.
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