Deal Announcement 03/13: Service Industries

The Deal

As part of a strategic review, SNCB Logistics S.A. (“SNCB Logistics”) decided to dispose its Duisburg-based subsidiaries Haeger & Schmidt International GmbH (“HSI”), H&S Container Line GmbH (“HSCL”), Rheinkraft International GmbH (“RKI”) as well as its majority stake in Antwerp-based RKE NV (“RKE”) (together referred to as “the Companies”) with the intention to re-focus on their core business of rail freight. The Companies are logistics service providers offering water, rail and/or road transportation primarily in the Rhine area with a focus on steel and related products and materials.

The process had been set up in a way to allow an investor to acquire all four entities combined based on their complementary business models and common customer base. As outcome from the competitive bidding process, SNCB Logistics decided to sell100% of the shares of HSI, HSCL as well as the majority stake in RKE to the Felbermayr Group and separately close on an MBO transaction for RKI with the company’s CEO, Dirk Müller.

By acquiring HSI, HSCL and RKE, Felbermayr expands its service offering with container transportation including upstream and downstream transportation, gains experience in the stripping and staffing of inland vessels, has entered the market for short sea transportation, and operates as a shipping agent. Dirk Müller will build on RKI’s existing and strong customer base and utilize the company’s expertise in special products handling to further stabilize and grow the business in a demanding market.

SNCB Logistics mandated PwC to provide lead advice on the sale of the target entities in September 2012. Prior to the market approach, extensive Financial Factbooks for the target companies were prepared. PwC conducted a competitive sales process to identify strategic as well as financial acquirers while developing significant buyer interest, coordinating management meetings and due diligence, and assisting SNCB Logistics in successfully negotiating a transaction with the Felbermayr Group and Dirk Müller, respectively. Throughout the sale process, PwC advised SNCB Logistics on all aspects of the deal, including purchaser identification, due diligence requirements, deal pricing, and structuring issues. The PwC M&A team pursued an aggressive time line to assist in completing this transaction.

The Companies

The Companies are geographically focused along the backbone of European trade flows, connecting Europe's main seaports in Antwerp and Rotterdam with the hinterland. HSI and RKE provide shipping spaces for conventional cargo as well as steel, bulk and heavy goods, covering all of Europe’s inland waterways as well as select European maritime routes. HSCL provides barge services as well as rail services complemented with trucking / forwarding primarily for container freight. RKI operates in four major segments –Transport Logistics, Steel Trade & Service Centres, Project Logistics and Production & Storage Logistics. Equipped to manage an annual freight volume of nearly 17 million tons, the Company’s fleet comprises 331 trailers and 66 trucks.

Felbermayr Holding GmbH

The Austria-based Felbermayr Group is a family-owned business with annual sales of € 360m and an international reach. The Company provides all transportation modes – rail, road and water – and operates storage facilities and an industrial dock for the handling of heavy goods. Felbermayr also provides an extensive range of engineering services, spanning from civil engineering to technically demanding special solutions in alpine terrains.

SNCB Logistics S.A.

SNCB Logistics S.A. conveys goods by rail and waterway under two brands IFB - specialising in intermodal container transport, as well as Xpedys - handling bulk freight, steel, and industrial and consumer goods. SNCB Logistics was formed from the freight division of the Belgian national railways, and incorporated as a separate company in early 2011.

PwC

The PwC M&A teams in Germany and Belgium acted as exclusive financial adviser to SNCB Logistics S.A.

PwC employs nearly 1,000 M&A professionals around the world, realizing approximately 300 successful transactions per year. We specialize in a wide range of independent M&A services including advice on acquisitions and disposals, mergers and public takeovers as well as structured financing.

The PwC deal team consisted of Michael De Roover and Martin Schwarzer (both Partners), Alexander Wenzel (Senior Manager) and Koen Vermoere (Director) (both project lead), Bernhard Kraska (Manager), Sebastian Kowolik (Senior Consultant), Gregor Schäfer and Julius Nierwetberg (both Consultants).