Investment funds: financiers attack TRM

investment funds, carriers

Transport, which has long been considered a loss-making industry, is once again experiencing interest from investment funds. Why are there more and more of them entering the capital of carriers? response elements.


Siparex at Top Chrono, Tikehau at Sterne, Paris Fonds Vert at coursier.fr, NCI at Leroy Logistics, Nord Capital Investissement at Envoyé Spécial, BNP Paribas Développement at Jardel, Aquasourça at Astr’in, Eurazeo at Flash Europe… entered the capital of many companies to support their growth or facilitate their transfer. They are mainly interested in ETI, not SMEs.»clarifies Frederick Portera, M&A consultant at Strategeo. The goal of the investment fund is to double its share in 7 years.»recalls Frederick Porter.

But the situation is changing. In recent years, TRM has attracted more interest from financiers who are confident in the sustainability of carriers. “Investing in transportation is less random than betting on a digital startup with the hope of exponential growth. Because often for every four equity investments, three die with the company.»notes Frederick Porter. “By investing in TRM, there is less chance of losing on arrival»he assures. If the carrier were considering the possibility of obtaining the services of an investor, it would not be difficult to find one. But not everyone wants it.

Accelerators growth

“There are entrepreneurs who don’t want to share their capital, it’s a shame because they are depriving themselves of the opportunity to grow.», says William Beghery, road transport expert at Upply. Which gives the example of Stern, who owes his exponential growth to the arrival of investors in his capital. He also recalls that it was thanks to these same funds that Perrenot became a heavyweight in road transport with a turnover of 900 million euros. Often, in order to be able to conduct external growth operations to reach a critical size, carriers call on investment funds.

William Beghery explains that investing in TRM is interesting because business in this sector is still undervalued. If companies are valued on average at 7-8 times their earnings, that valuation is no more than 5.2 times their earnings in TRM.» Hence, there will be good deals. Moreover, the transport expert expects to improve the industry’s marginality due to the lack of drivers and high demand. According to Upply surveys, road transport will continue to grow steadily at 4-5% per annum over the next few years. This has not escaped investors either.

Allies for change profession

And if employees can be intimidated by the arrival of such funds, William Beghery believes that their presence in TRM is good from all points of view. Even if they are not philanthropists and their goal remains to make money, they provide the financial resources necessary for the development of companies, the greening of fleets, the growth of artificial intelligence … “ But not only. They have stakes in companies from different sectors and function as clubs where non-competitive leaders share and enrich their experience in areas as diverse as management, law, human resources, etc.»says William Beghery.

He adds that by helping the companies they invest in multiply growth operations, investment funds help create bigger companies that can change the profession’s relationship with shippers. Today, the RFT market is still fragmented. Shippers face companies with an average headcount of 200 people. Significant size, but not enough to be able to negotiate, being in a favorable balance of power for them. If shippers have to deal with larger companies, the relationship between shipper and carrier can turn in favor of the latter.»predicts William Beghery.

summary

2022 mixed year for acquisitions

Due to energy price and inflation uncertainties, the soufflé fell slightly in the buying market. Buyers are still there, but more observant and sometimes put off by asking prices, a carrier looking to run an outward growth operation told us. We see a gap between the expectations of sellers and what we are ready to offer.» Frederick Portera, M&A consultant at Strategeo, confirms that some sellers have not yet come down to earth in relation to market realities.

Bpifrance’s commitment to transport

“When an investment bank applies to a transport company, some funds immediately refuse the dossier.»notes Denis Talaron, investment director at Bpifrance.For us, this is a sector that we have historically supported in both funding and equity. Carriers will have to accelerate their green transition and Bpifrance is committed to supporting them in this process.»he continues.

we have 2.5billion euros invested in this sector and direct stakes in about twenty transport and logistics companies.»– continues Alain Thu, also the investment director of Bpifrance. If we expand our holdings to funds that invest in companies in this sector, we must add 150»he adds.

The two men make sure that the funds give preference to companies operating in niche markets. The quality of the management team is of course fundamental. You have to be a great manager because the sector has very little profitability.»comments Alain Thue, who adds that if a company does logistics in addition to transport, it is better because it ensures the transparency of contracts.