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Echo Global Logistics returns to buy niche businesses after pause
US FREIGHT broker Echo Global Logistics is getting back into the mergers-and-acquisitions market after a 12-month pause, reported the Wall Street Journal.
Having increased its revenues four-fold over the last five years through a series of acquisitions, Echo has been one of the drivers in a wave of logistics industry consolidation in North America.
Echo's last major acquisition was in April 2015 with the purchase of Command Transportation for US$421 million, expanding its scale by about 50 per cent.
The freight broker last month hired John Mims, an executive from the investment banking world, to help lead a new push toward acquisitions.
Explaining Mr Mims' appointment as vice president of corporate development, the company's president and COO Dave Menzel said: "Echo is well positioned to continue its track record of growth by leveraging its brokerage and managed transportation offering. "John understands our development, strategy, and competitive landscape, and we are pleased to have him now lead our corporate development strategy," Mr Menzel said.
Analysts say slow demand so far this year and plentiful truck capacity has dragged down prices, cutting into revenues for freight brokers - putting financial pressure on smaller operators and sending publicly traded companies looking for acquisitions to add revenue and reach in the freight market.
Echo is most interested in further building its core transport management services that secure truck space for manufacturers and retailers, but the company will look outside its core business if the right opportunity came along - including a bigger presence in Mexico and Canada and new areas such as technology, warehousing, last-mile, and freight forwarding.
Having increased its revenues four-fold over the last five years through a series of acquisitions, Echo has been one of the drivers in a wave of logistics industry consolidation in North America.
Echo's last major acquisition was in April 2015 with the purchase of Command Transportation for US$421 million, expanding its scale by about 50 per cent.
The freight broker last month hired John Mims, an executive from the investment banking world, to help lead a new push toward acquisitions.
Explaining Mr Mims' appointment as vice president of corporate development, the company's president and COO Dave Menzel said: "Echo is well positioned to continue its track record of growth by leveraging its brokerage and managed transportation offering. "John understands our development, strategy, and competitive landscape, and we are pleased to have him now lead our corporate development strategy," Mr Menzel said.
Analysts say slow demand so far this year and plentiful truck capacity has dragged down prices, cutting into revenues for freight brokers - putting financial pressure on smaller operators and sending publicly traded companies looking for acquisitions to add revenue and reach in the freight market.
Echo is most interested in further building its core transport management services that secure truck space for manufacturers and retailers, but the company will look outside its core business if the right opportunity came along - including a bigger presence in Mexico and Canada and new areas such as technology, warehousing, last-mile, and freight forwarding.
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