A day before it releases its second-quarter earnings, C.H. Robinson announced the divestiture of its European Surface Transportation (EST) operations to Sennder Technologies GmbH, a company it describes as “the leading digital road freight forwarder in Europe.”
The price of the transaction was not disclosed by C.H. Robinson in its statement announcing the sale. The company also said it was not taking further questions on the sale of EST to Sennder before the earnings release and conference call with analysts Wednesday.
In its latest 10-K report, C.H. Robinson (NASDAQ: CHRW) reported earnings for its business line described as “Other Surface Transportation,” which it also said is made up primarily of its EST operations. In 2023, it recorded adjusted gross profits of approximately $74 million, down from $76.3 million a year earlier but up slightly from $73 million in 2021.
For all of 2023, C.H. Robinson reported adjusted gross profit of $2.6 billion for the entire company.
The announcement of the sale of EST also came with an indirect reiteration that C.H. Robinson would hold on to its global freight forwarding business, which had been discussed by some analysts as a candidate for divestiture by new CEO Dave Bozeman.
In the statement, Bozeman said that “to win, we need to focus on what sets us apart and build on our competitive advantages.”
C.H. Robinson is not abandoning Europe as a result of the sale. To emphasize that, Bozeman said, “we are committed to our global forwarding and managed services presence there.”
The statement made it clear that the sale was not considered a minor transaction but rather part of the larger changes Bozeman is attempting to implement.
“This move is part of the Company’s enterprise strategy to get fit, fast and focused and to drive focus on profitable growth in its four core modes – North American truckload and less-than-truckload and global ocean and air – as the engines to create the most value for its stakeholders,” the company said in the statement.
It is the first divestiture or acquisition made by C.H. Robinson since Bozeman took over as CEO a year ago.
EST has been a subsidiary of C.H. Robinson since 1994, the company said. It made an acquisition to expand its activities as recently as 2021, buying Combinex Holding for $14.7 million in a cash transaction.
C.H. Robinson’s first-quarter earnings were greeted with a bullish surge, primarily because its sequential numbers compared to the fourth quarter of 2023 were solidly positive even as its year-to-year comparisons remained challenged. In the past three months, per Barchart data, C.H. Robinson stock is up about 25.4%.
There was no obvious reaction to the news of the European sale on Tuesday, with the stock price little changed.
David Nothacker, the CEO of Sennder, said the acquisition of EST will “be pivotal in advancing Sennder’s roadmap.”
“With its vision to accelerate global trade to deliver products and goods that drive the world’s economy, C.H. Robinson aligns strongly with Sennder’s mission and values to create an efficient and sustainable road freight network in Europe,” Nothacker said in the statement. “We are deeply impressed by the European Surface Transportation team from C.H. Robinson, and with our combined business and enhanced talent pool, we can deliver substantial growth and operational scale, accelerating our European expansion and increasing network density and digital capabilities for the benefit of carriers, shippers, and the wider industry.”
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