DSV A/S, the third-largest global logistics provider by revenue, announced plans Tuesday to acquire two Arizona-based logistics companies owned by the same family to support its new market focus on the semiconductor industry and cross-border services to Mexico and Latin America.
The Danish transport and logistics company said it reached an agreement to take over S&M Moving Systems West and Global Diversity Logistics (GDL). Both companies are located in the Phoenix area and have 130 total employees. They provide domestic trucking, air and ocean forwarding, warehousing, trade show logistics and special services for the semiconductor industry at 11 sites in California, Oregon and Arizona.
S&M Moving Systems is an asset-based household goods and specialized transportation carrier that moves electronics, medical and manufacturing equipment, artwork and other commercial items. GDL is a non-asset based 3PL.
The transactions, which are expected to be finalized in April, also fit with DSV’s (DXE: DSV) recent decision to lease a hangar at Phoenix-Mesa Gateway Airport to support all-cargo charter flights.
“We have a strong presence in the U.S., and these acquisitions underline our continuous commitment to strengthening our U.S. position, competencies and service offerings,” said Niels Larsen, president DSV Air & Sea U.S., in a news release. “They also provide access to a strong heritage and a wealth of knowledge and experience in the semiconductor industry.”
Large outsourced logistics providers have identified the semiconductor industry as a large growth opportunity, especially as governments and manufacturers invest in massive fabrication facilities to keep up with demand and spread risk in a business where production is currently very concentrated.
S&M Moving Systems and Global Diversity Logistics have more than 1 million square feet of logistics space under management and will contribute to DSV’s contract logistics capabilities in the region.
Kuehne+Nagel, the world’s largest logistics provider, recently declared it will invest $500 million by 2026 to grow capabilities for supporting the semiconductor sector.
Arizona’s emergence as a manufacturing hub for electric vehicles and batteries, as well as a growing market for EVs, also offers logistics opportunities for DSV.
DSV executives said having a freight forwarding base in Arizona gives the company another location for arranging freight moves between the U.S. and Latin America, supplementing a recent expansion of cross-border Mexico operations.
“With two official gateways into Latin America, we are better placed to support customer needs, particularly during busy periods and congestion,” said Robert Greene, executive vice president DSV Road U.S.
Terms of the deal were not disclosed.
DSV’s 2022 adjusted operating profit increased 48% to $3.6 billion in 2022 on revenue of $33.8 billion (up 29%) year over year, although results were significantly weaker in the fourth quarter as the overall logistics market slumped.
DSV last year acquired Agility GIL, a major contract logistics company based in Kuwait, and the company remains on the lookout for mergers and acquisitions.
Click here for more FreightWaves/American Shipper stories by Eric Kulisch.
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