Information on the Target

CEVA Logistics has signed a binding share transfer agreement to acquire 100% of Borusan Tedarik Zinciri Çözümleri ve Teknoloji Anonim Şirketi, a leading logistics firm based in Turkey. The total acquisition cost is set at $440 million (USD), which may be adjusted based on ordinary net cash and working capital assessments. Borusan Holding, a privately held entity, owns 69.47% of Borusan Tedarik, while the remaining shares (30.53%) are held by Borusan Yatırım, a publicly traded company. This acquisition also encompasses Borusan Tedarik's subsidiaries located in Germany, Bulgaria, Hong Kong, and China, and is contingent upon typical closing conditions and regulatory approvals.

Founded over 50 years ago, Borusan Tedarik specializes in delivering a wide range of logistics solutions within the Turkish market. Their offerings include contract logistics, finished vehicle logistics (FVL), full truckload (FTL), less than truckload (LTL) ground transport, as well as air and ocean freight and customs services. With projected gross revenue of $567 million (USD) for 2024, Borusan Tedarik boasts a diverse portfolio of clients, including global and domestic industry leaders poised to benefit from CEVA’s extensive global logistics network.

Industry Overview in Turkey

The logistics industry in Turkey has experienced significant growth, driven by the country's strategic location as a gateway between Europe and Asia. The sector is characterized by a robust infrastructure and increasing investments, positioning Turkey as an ideal hub for logistics and supply chain operations. In recent years, e-commerce and manufacturing activities have surged, further bolstering demand for comprehensive logistics services.

Turkey's logistics sector is supported by a well-developed transport network that includes extensive road, rail, maritime, and air transport routes. The government has initiated various projects to modernize and expand the logistics infrastructure, aiming to enhance efficiency and reduce costs. These advancements have attracted both domestic and international investment, contributing to the sector's dynamic growth trajectory.

The increasing complexity of supply chains, coupled with a rising emphasis on sustainability and digitization, has influenced the evolution of logistics services in Turkey. Companies are now adopting advanced technologies such as IoT, big data analytics, and automation to improve operational efficiency and respond to changing market demands. This trend is anticipated to continue, leading to more innovative logistics solutions across the industry.

Overall, Turkey's logistics industry presents a promising landscape for continued growth, with increasing demand for various logistics services driven by ongoing economic development and globalization. The market potential is further enhanced by the strategic initiatives implemented by both the public and private sectors.

The Rationale Behind the Deal

The acquisition of Borusan Tedarik represents a strategic move by CEVA Logistics to enhance its market presence in Turkey, a key growth area within the logistics sector. The incorporation of Borusan Tedarik's robust logistics capabilities and extensive client relationships is expected to significantly bolster CEVA's operational capacity and service offerings in the region. Furthermore, this deal would nearly double CEVA’s existing footprint in Turkey, solidifying its position as a leading logistics provider.

Additionally, by integrating Borusan Tedarik’s team of approximately 4,000 employees, CEVA aims to tap into local expertise and operational efficiencies, allowing for a stronger competitive advantage in delivering logistics solutions tailored to the diverse needs of customers in Turkey and beyond.

Information about the Investor

CEVA Logistics, a subsidiary of CMA CGM Group, is recognized as a global leader in supply chain management and logistics services. With a strong reputation built on innovation and operational excellence, CEVA operates across various sectors including air, ocean, and ground transportation, as well as contract logistics. The company is committed to leveraging its extensive global network to provide comprehensive and customized logistics solutions for its customers.

CMA CGM Group, the parent company, has established itself as a key player in the shipping industry, providing CEVA with the resources and expertise necessary to expand its service offerings and reach. This affiliation allows CEVA to effectively combine maritime and logistics operations, creating synergies that enhance service delivery and optimize supply chains for clients globally.

View of Dealert

The acquisition of Borusan Tedarik by CEVA Logistics is a strategically sound investment that aligns with the company’s broader growth objectives in a burgeoning Turkish logistics market. The deal not only enhances CEVA's service capabilities but also strengthens its competitive position within the region, where demand for logistics services is expected to continue rising. By integrating Borusan Tedarik’s established operations and skilled workforce, CEVA is better equipped to respond to evolving market needs and customer expectations.

Furthermore, this acquisition provides CEVA with access to key sectors in Turkey, including e-commerce and manufacturing, which are experiencing rapid growth. Investing in Borusan Tedarik allows CEVA to diversify its offerings and leverage existing client relationships, leading to increased revenue potential. The move is also beneficial in terms of achieving economies of scale and enhancing operational efficiencies.

In conclusion, CEVA’s decision to proceed with the acquisition of Borusan Tedarik is likely to be a positive investment that promises substantial returns, provided that it successfully integrates the newly acquired assets. The strategic acquisition is well-positioned to capitalize on the advancements and opportunities within Turkey's logistics industry, making it a vital component of CEVA's growth strategy.

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