Mover Bekins to Get New Household, Agreeing to Acquisition
Household-goods mover Bekins Co. on Tuesday agreed to be acquired by International Logistics Ltd., a company recently formed by the Los Angeles-based investment firm William E. Simon & Sons.
The proposed purchase price was not disclosed. But based on other transactions, the price is probably less than the $230 million of revenue that Bekins recorded in its fiscal year ended March 31. A year ago, for example, the Mayflower moving business--which is larger than Bekins--changed hands for $90 million.
Chicago-based Bekins, the nation’s fifth-largest moving company, is currently owned by IMR Fund, an investment group led by Minneapolis financier Irwin L. Jacobs.
Though perhaps most publicly recognized for its household-moving vans, the 105-year-old Bekins is also a so-called logistics provider, meaning it ships and often assembles other merchandise such as computers, consumer electronics and trade-show exhibits.
It’s that logistics business that William E. Simon & Sons and its partners in International Logistics want to build upon, because it’s more profitable and growing faster than the household-moving sector. William E. Simon & Sons was started in 1988 by the former U.S. Treasury secretary and his two sons.
Logistics is part of an “outsourcing” effort among companies that are hiring other firms to handle such moves, “and it’s a trend that’s been growing rapidly,” William E. Simon Jr. said in an interview.
The household-goods sector has been flat for several years and marked by intense price-cutting, which has shaved all of the competitors’ profits. At Bekins, the household-goods operation accounted for nearly 65% of its revenue last year, but less than 50% of its operating profit, Simon said.
Those conditions led to the first merger among major moving firms a year ago, when UniGroup Inc.--the parent of United Van Lines--bought Mayflower Group Inc.’s moving division to create the nation’s largest household mover.
But Simon said “at this point we have no plans to divest ourselves” of Bekins’ household-goods operation because it helps give Bekins “a broad range” of moving services to offer.
International Logistics also hopes to bolster its logistics business by acquiring an international freight-forwarding company, which would enable the firm to move goods by all modes of transportation, he said.
Bekins has a network of 400 independent agents and 18 company-owned agencies. Bekins mainly oversees scheduling, billing and cash disbursement, while the agencies coordinate moves and assign them to specific drivers under contract with Bekins.
International Logistics’ other partners include an investment fund managed by Oaktree Capital Management and Roger E. Payton, a former head of Allied Van Lines who is now International Logistics’ chief executive.
