Bpost, also known as the Belgian Post Group, inked a deal to acquire e-commerce service provider Radial for $820 million. The transaction, which includes acquiring all of the shares of Radial, is expected to close in the last quarter of fiscal 2017.
The transaction follows Wal-Mart Store Inc.’s acquisition of Parcel last week, which is part of a larger drive across the retail market that focuses on improving the last mile of e-commerce delivery. Bpost’s deal for Radial, formerly known as Ebay Enterprises, follows over a half-dozen acquisitions, partnerships and/or strategic deals aimed at expanding its e-commerce logistics solutions.
Bpost said the expected annual revenues of Radial for the current fiscal year, on a normalized basis, is expected to be between $970 million and $1 billion, and the forecasted normalized earnings before interest, taxes, depreciation and amortization is pegged to be between $65 million and $70 million. Bpost’s revenue in 2016 totaled 2.4 billion euros.
J.P. Morgan Securities LLC acted as the financial advisor to Radial for the deal.
“The acquisition leverages Radial’s e-commerce service, expertise and scale with Bpost to provide an industry-leading cross-border value proposition for its customers in Europe and North America,” the company said in a statement adding that in the transaction, Bpost “will gain access to a ready-built U.S. logistics footprint, including 24 fulfillment centers, 300-plus retail customers, and more than 27,000 e-commerce workers, allowing the company to tap into the roughly 20 percent of all e-commerce orders that flow between the U.S. and E.U. today.”
Radial, based in King of Prussia, Pa., offers integrated e-commerce logistics and omnichannel solutions. The company said last year, it fulfilled over 306 million units across its 24 fulfillment centers. Bpost described Radial as “ahead of its peers” as the company also “offers integrated services such as payment, tax and fraud protection services, fulfillment and customer care for brands and retailers.”
Koen Van Gerven, chief executive officer of Bpost, said he’s convinced “that offering integrated and seamless e-commerce logistic solutions to our U.S. and European customers will help them grow their businesses. The expertise and capabilities of Radial employees are a unique complement to Bpost and will help us in becoming a leader in e-commerce logistics.”
The race to capture market share of the “last mile” is fully under way. Aside from Wal-Mart’s deal with Parcel, Amazon has stepped up efforts to deploy delivery drones. And last week, media reports noted that the online giant was looking to test a last-mile delivery service being used in India in the U.S. Called Seller Flex, the service picks up products from third-party sellers and delivers it to shoppers. Analysts noted that even with a deployment of Seller Flex, which Amazon has not confirmed, they expected Amazon to continue to rely on carriers such as FedEx and UPS to make those deliveries in the U.S.
Bpost noted that in light of e-commerce growth, “the development of parcel logistics is one of the most promising areas in a new digital world.” The company went on to note that it “seeks to capture the fast-growing e-commerce logistics supply chain by enabling a strong cross-border value proposition for its customers.”
Matthew Espe, ceo of Radial, said there “has never been a more important time when it comes to helping brands grow their online business profitably, especially when reaching their customer base internationally. Joining the Bpost family is a critical next step for both companies as we strive to help meet customer expectations on the backbone of industry-leading technology and services.”
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