Information on the Target

CTT – Correios de Portugal (hereinafter referred to as 'CTT') has reached an agreement to acquire 100% of the capital of Compañia Auxiliar al Cargo Expres (CACESA), a Spanish company specializing in customs services for international e-commerce, which holds a strong market position. The acquisition, facilitated through CTT's subsidiary CTT Expresso, values CACESA's assets at €91 million, representing an EBIT multiple of 5.5x.

The transaction is set to proceed once the necessary approvals under applicable concentration control regulations are obtained, with expected completion anticipated in March or April of 2025.

Industry Overview in Spain

Spain's e-commerce landscape has rapidly evolved, especially in the wake of the COVID-19 pandemic, which accelerated online shopping trends. The country has seen a significant increase in e-commerce activities, with both national and international players vying for market share. This growth has put pressure on logistics and customs operators to adapt swiftly, resulting in increased competition within these segments.

Within this thriving e-commerce environment, customs facilitation services have become increasingly vital. As the volume of cross-border transactions rises, streamlined customs processes are crucial for enhancing customer satisfaction and operational efficiency. Companies that offer automated customs solutions, like CACESA, are particularly well positioned to capture this burgeoning demand.

The rise in online retail in Spain has also led to higher consumer expectations for faster delivery times and efficient returns, which emphasizes the importance of integrated logistics solutions. This shift is driving investments in logistics capabilities, particularly in last-mile delivery and customs management, making it an attractive sector for investment.

Spain is also strategically located within Europe, serving as a key access point for goods traveling to and from other European markets. This geographic advantage enhances the appeal of Spain as a logistics hub, and companies that equip themselves with comprehensive customs services can significantly benefit from increased trade flows.

The Rationale Behind the Deal

The strategic rationale behind CTT's acquisition of CACESA centers on strengthening its position as a leading logistics operator in the e-commerce sector in the Iberian Peninsula. This acquisition is deemed a pivotal step in CTT's ongoing transformation efforts, aiming to provide an encompassing value proposition across the entire e-commerce value chain, from shipping to returns.

By integrating CACESA into its operations, CTT anticipates generating operational synergies that could yield over €5 million in incremental EBIT. These anticipated synergies include revenue growth from expanded last-mile delivery services and improved integration with CTT's customs processes, as well as cost efficiencies through enhanced operational capabilities and elimination of redundant expenses.

Information About the Investor

CTT – Correios de Portugal is Portugal's leading postal and logistics company. With a history dating back to 1520, CTT offers a comprehensive range of postal services and has been actively expanding its logistics and e-commerce capabilities in recent years. The company has recognized the shifting landscape of retail and is strategically repositioning itself to meet the growing demand for efficient logistics solutions.

Under the leadership of CEO João Bento, CTT has focused on innovation and transformation to enhance its competitive standing. The acquisition of CACESA aligns seamlessly with CTT's strategy to create a robust logistical framework that supports current and future e-commerce trends in both Portugal and Spain.

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This acquisition can be viewed as a potentially positive investment for CTT, considering the significant growth trajectory of the e-commerce sector in Spain. CACESA's established position in customs-related services presents CTT with an opportunity to enhance its service portfolio and address the evolving needs of e-commerce customers.

Moreover, by acquiring a company with a strong automated customs platform, CTT is likely to benefit from increased efficiency and scalability of its operations. This automation is crucial as it allows for rapid adaptation to the growing volume of cross-border transactions while maintaining high service standards.

The expected operational synergies, particularly in revenue growth and cost reductions, indicate that CTT could achieve a favorable return on investment through this acquisition. The anticipated EBIT growth demonstrates the financial viability of this strategic move, further reinforcing CTT's commitment to increasing its value proposition.

Overall, while market conditions can be unpredictable, CTT's strategic focus on becoming an integrated e-commerce logistics provider positions it well to capitalize on current market trends, making this acquisition a sound strategic investment in the long term.

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