NEW FACTORS IMPACT VALUATION IN STORAGE, SUPPLY CHAIN AND FULFILLMENT - WAREHOUSING & FULFILLMENT | FEBRUARY 2021
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NEW FACTORS IMPACT VALUATION IN STORAGE,
SUPPLY CHAIN AND FULFILLMENT
WAREHOUSING & FULFILLMENT | FEBRUARY 2021
3
WAREHOUSING & FULFILLMENT
New Factors Impact Valuation in Storage, Supply Chain, and Fulfillment
TABLE OF CONTENTS INDUSTRY TRANSFORMATION
Industry Transformation
For many decades, third-party storage, whether dedicated or public, was an
The Covid-19 Effect underappreciated segment of the supply chain with valuation EBITDA multiples
Key Trends & Drivers in the mid-single digits and few marquee transactions to make headlines.
However, awareness of the significance of warehousing started to germinate in
What Buyers Are Looking For in 2021
the 1980's with the introduction of lean manufacturing philosophies and just-in-
Valuation Estimates time inventory capabilities driven by computer software advances.
Notable M&A Transactions
Large manufacturers began to outsource their supply chain to streamline
Public Company Transaction Update
operations as speed to market and inventory turnover became key metrics for
Public Company Comparisons financial analysts. Third party warehousing was a cost-effective way to position
Q&A With NFI product with much great flexibility and became the default pathway for getting
product to retail locations. With the turn of the millennium, an even larger
Select Transactions
paradigm shift would emerge, that of online transactions and ultimately the
Report Contributors wholesale migration of consumers from brick-and-mortar retail to shopping
Firm Track Record from home.
Well, what does this really mean for warehousing? Basically, all the “operational”
functions of a store, like storing product, sorting product, packaging product
and servicing the product shifted from a retail location to a warehouse location.
So much of that fulfillment responsibility and customer experience value
handled by stores, are rapidly transferring to the warehouse, or “fulfillment
center.” This shift has large implications for the perceived value of category
(now called fulfillment services) and therefore transaction values of third-party
storage companies.
CONTACTS
Retail E-Commerce Sales Worldwide
Burke Smith
Managing Director $10,000
505-690-3561
bsmith@capstoneheadwaters.com $8,000
U.S. Dollars in Billions
6,542
Jay Mercier 5,695
Vice President $6,000
4,927
404-934-6362 4,206
jmercier@capstoneheadwaters.com $4,000 3,535
2,982
2,382
Nathan Feldman 1,845
$2,000 1,336 1,548
Associate
845-416-5906
nfeldman@capstoneheadwaters.com
2014 2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E
Source: Statista
www.capstoneheadwaters.com 2
Warehousing & Fulfillment | February 2021
THE COVID-19 EFFECT
Online shopping has accelerated during the pandemic and heightened demand for e-commerce fulfilment services. As a
result, and with this trend expected to continue over the next few years, acquisition activity in the Fulfilment sector has also
accelerated and brought heightened valuations for companies that provide the infrastructure to make e-commerce possible.
While e-commerce giants such as Amazon (Nasdaq:AMZN) have seen a jump in revenue, rising from $75 billion in Q1 2020
to over $125 billion in Q4, small and medium-sized enterprises (SMEs) have also shifted their strategies to an online focus.
This trend can be seen in Shopify’s (NYSE:SHOP) impressive revenue jump in Q2, rising from $470 million in Q1 to $714
million in Q2. Traditional brick and mortar retailers have taken notice. After its acquisition of Jet.com in 2016, Walmart
(NYSE:WMT) has been actively pushing into e-commerce and is top of mind for CEO Doug McMillon, who stated:
“Our omnichannel strategy, enabling customers to shop in seamless, flexible ways, is built for serving the
needs of customers during this crisis and in the future.” 3
The most telling part of this statement is “in the future,” which signals that the largest retailer in the world understands that
these changes are not going away. This omni-channel distribution requirement is putting significant pressure on large third-
party warehousing and supply chain companies which service the consumer space. The choice is either invest in upgrading
existing facilities to handle omni-channel or seek acquisitions and partners to manage online orders.
E-Commerce Fueled Multiple Expansion
Revenue TEV/Revenue
$800 70x
$700
60x
$600
50x
U.S. Dollars in Millions
TEV/Revenue Multiple
$500
40x
$400
30x
$300
20x
$200
10x
$100
$0 0x
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
2015 2016 2017 2018 2019 2020
Source: Capital IQ, multiples are an average for the quarter; Shopify Q2 2020 Earnings Transcript
3
Warehousing & Fulfillment | February 2021
KEY TRENDS & DRIVERS: DISTRIBUTED FULFILLMENT NETWORKS
Shopify introduced its fulfillment network plan in 2019 with a stated total capital investment of $1 billion to build out its own
distribution infrastructure. This vertical integration strategy is meant to drive shippers to use their software platform
exclusively. Other companies are taking the opposite approach by remaining agnostic to the e-commerce platform and
leveraging the tens of thousands of existing local and regional warehouses in the U.S. Several meaningful attempts at
developing national scale fulfillment platforms have emerged in the last five years, primarily to service smaller independent
brands that market directly to consumers. Valuations of these companies, which have raised significant venture capital, tend
to be much higher than the warehousing companies doing the fulfillment work, on the promise that their platforms can
aggregate large order volumes from thousands of smaller shippers.
The idea is also catching on with very large strategics like UPS (NYSE:UPS), which launched its own independent
subsidiary Ware2Go in 2018. There is a ferocious land grab for customer accounts and warehousing partners to service
these accounts. For warehousing companies that have underutilized capacity or are looking to shift from storage to
fulfillment models, there are some benefits to partnering with platforms that can deliver significant volume, as well as
potential valuation premiums for their own businesses. The question remains whether the unit economics of partnering
justifies the required investment in technology, racking/binning/sorting, and additional staffing.
Headquarters: Chicago, IL Headquarters: Seattle, WA
Capital Raised: $130 million Capital Raised: $144 million
Valuation: $568 million Valuation: $100 to $500 million
Key Investors: Softbank, Menlo Ventures, Key Investors: Activate, Madrona, Tiger
Bain Capital Global, T. Rowe Price
Locations: 9 domestic fulfillment Locations: Claims 1,000+ warehouse
2 international partners with various service
Adding partner locations levels
Headquarters: San Francisco, CA Headquarters: Los Angeles, CA
Capital Raised: $70 million Capital Raised: $15 million
Valuation: $210 million Valuation: $40 million
Key Investors: 9Yards, Alumni Ventures Key Investors: Canvas Ventures
Locations: Claims 3,000+ warehouse Locations: Claims 1,000+ warehouse
partners with various service partners with various service
levels levels
Source: Pitchbook, Crunchbase and Company Interviews
4
Warehousing & Fulfillment | February 2021
WHAT BUYERS ARE LOOKING FOR IN 2021
Over the past few months, we have spoken with dozens of larger supply chain companies about their acquisition plans for
2021. While there are always company specific factors which weigh more heavily with specific buyers, four characteristics
regularly emerge as important differentiators for prime acquisition targets. Based on the interest level of buyers, we expect
that 2021 should be an active transaction year as companies adjust to the post-COVID supply chain environment.
Technology Integration Value Added Services
• Fast EDI implementation • Picking and packing
• E-commerce connectivity • Custom packaging & delivery options
Value added services does not just apply to fulfilling
You don’t have to have your own team of
e-commerce orders. Think about how your
programmers to have a successful technology
operation can streamline your customers’ supply
capability. Most buyers are looking for efficient EDI
chain process. Activities like custom sorting and
implementation as the highest priority. It should not
packaging, wrapping and printing can help make
take months to onboard a new customer that wants
your company more valuable to customers and
to transact electronically. Beyond EDI, your WMS
acquirers. Even commodity and B2B storage
should be capable of handling connectivity to third
companies need to think about omnichannel
party software platforms like Shopify, Magento, Big
distribution models. The needs of one customer
Commerce (Nasdaq:BIGC), Amazon, and others.
most likely apply to a spectrum of potential new
Advanced fulfillment processing and automated
customers and are typically worthy of strategic
connection to transportation and delivery providers
investment.
are other technology hot-buttons for buyers.
Footprint and Scalability Transportation Revenue
• 500k+ overall capacity • Parcel management or last mile delivery
• Multi-market presence • Brokerage capability
Acquisition transactions, take considerable financial Storage provides a solid base for warehouse
and personnel resources to execute and buyers operation but does not offer the transactional
want to make sure they are spending time where revenue opportunities that buyers are looking for.
the impact is greatest. This generally means that Operators with e-commerce customers can often
more focus is placed on scale, targets with more insert a service charge for connecting with parcel
capacity and transaction volume. Larger buyers will delivery providers like UPS and Fedex (NYSE:FDX).
want to bring their own customer accounts into an Other transportation revenue services include
acquired warehouse, so some room to grow is arranging LTL transport or even inbound logistics,
certainly a plus if not access to new space. particularly for smaller shippers. Some larger
Additionally, while some buyers are looking for very warehouses also successfully integrate drayage
specific locations on the map, acquisition candidates services or last mile delivery on a captive or owner
with a bigger footprint are usually more appealing. operator basis.
5
Warehousing & Fulfillment | February 2021
VALUATION ESTIMATES: MIDDLE MARKET STORAGE AND FULFILLMENT COMPANIES
11-13x
6-7x EBITDA Multi-state company with 10+ facilities
Regional players with 1-3 warehouses >75% B2C revenue with control of transportation spend
Minimal B2C business, low transport Automated order flow with leading e-commerce aggregators
spend revenue Fortune 500 and growth customer mix
Minimal technology integrations, still 10%+ revenue growth
largely manual 10%+ EBITDA margins
Mostly smaller SMB customers with
higher-than-average churn
3%-5% revenue growth
3%-7% EBITDA margins
15x+
Pure play software platform with
8-10x
revenue share warehouse partners
Multi-state company with 5-10 facilities National network coverage of major
50%+ B2C revenue with significant transportation population centers
spend revenue 20%+ annual account growth
Robust TMS with connectivity capability to e- 90%+ B2C order flow
commerce platforms Control of transportation spend
5%-10% revenue growth 25%+ revenue growth
5%-8% EBITDA margins Profitable model
NOTABLE M&A TRANSACTIONS
2020 2019 2020
Clearly a vertical integration statement for The Whiplash acquisition was about Big Box supply chain has become its own
the shipping giant looking to build a software to grow e-commerce fulfillment. animal. CHR realized that consolidation
presence in the US retail and e-commerce Now PLG is looking to scale the network services are critical to cost effectively manage
distribution space. and customer base. lots of shippers with the same endpoints.
2020 2019 and 2020 2018
Hub Group wanted a leading position in retail Dot Family Holdings wants to replicate Korea based CJ Logistics saw an opportunity
consolidation and did so with the acquisition of its success in food distribution within the to dramatically expand its US network as it
Case Stack. The asset lite platform leverages e-commerce logistics space. Its seeks to fulfill its ambition to become an
Hub’s own footprint to more rapidly gain scale acquisition of Tagg and LeSaint creates a international logistics leader. The transaction
and market coverage. formidable network to service the was a notable marker for international
branded retail and omnichannel market. interest in the US supply chain sector.
6
Warehousing & Fulfillment | February 2021
PUBLIC COMPANY TRANSACTION UPDATE
On December 2, 2020, XPO (NYSE:XPO) announced that its board of directors has unanimously approved a plan to pursue a
spin-off of its logistics business unit that would result in XPO shareholders owning stock in both companies. XPO intended
to structure the spin-off as a transaction that is tax-free to XPO shareholders. XPO Logistics will retain the freight
transportation business which consists of LTL and non-asset freight brokerage. NewCo will be the second largest contract
logistics company in the world with ~200 million square feet of warehouse space.
XPO Logistics Sees Stock Rise after Spin-Off Announcement
The equity market reacted favorably to the corporate announcement and the stock price moved higher with
approximately four million shares changing hands on the first day of trading after the 8-K was released.
Volume Stock Price
$125 5
The plan to pursue a
spin-off is announced
Volume in Millions
$120 4
after the market close.
U.S. Dollars
$115 3
$110 2
$105 1
$100 0
2020
Source: XPO Logistics 8-K Published 12.02.20 & Capital IQ
“By uncoupling our transportation and logistics segments, we intend to create two high-performing, pure-play companies to
serve the best interest of all our stakeholders. Both businesses will have greater flexibility to tailor strategic decision making
and capital allocations to their end-markets, with the benefit of strong positioning as customer-focused innovators. We
currently believe that this spin-off is the most effective way to unlock significant value for our customers, employees and
shareholders.”4 - Brad Jacobs, Chairman and Chief Executive Officer of XPO Logistics
As standalone companies, the freight transportation and contract logistics businesses will probably have a higher combined
equity market valuation (sum-of-the-parts) than what is currently being reflected in XPO Logistics’ market capitalization. The
board of directors want to unlock shareholder value and discard the “Conglomerate Discount” that weighs heavily on the
stock price of the company.
Company Rationale for the Spin-Off:
The companies will have the ability to focus on their specific strategic priorities and customer requirements
Provide additional differentiation by having its technology team focus on enhancing proprietary software developed for
its specific service offering
The investor base will be aligned with a clear-cut value proposition and be properly valued by the investment community
Each busines would have a better opportunity to attract and retain world-class talent by offering meaningful equity-based
compensation that correlates closely to performance
Separate public stock listing would enhance each company’s ability to purse accretive M&A opportunities, with the benefit
of an independent equity currency at a potentially higher value.
7
Warehousing & Fulfillment | February 2021
PUBLIC COMPANY COMPARISONS: CONGLOMERATE VS. “PURER” PLAY
Warehousing & E-Commerce Fulfillment
XPO Logistics Prologis Clipper Logistics
40x
35x
30x
30.2x
EV/EBITDA
25x
20x
15x
10.4x
10x
5x 7.8x
0x
2018 2019 2020 2021
Less-Than-Truckload
XPO Logistics SAIA Old Dominion Freight Lines
25x
20x
20.1x
EV/EBITDA
15x
14.9x
10x
7.8x
5x
0x
2018 2019 2020 2021
Freight Brokerage
XPO Logistics C.H. Robinson Echo Global Logistics
35x
30x
25x
18.0x
20x
EV/EBITDA
15x 14.7x
10x
5x 7.8x
0x
2018 2019 2020 2021
Source: Capital IQ
8
Warehousing & Fulfillment | February 2021
Q&A With NFI
Capstone Headwaters spoke with TJ Lynch, Senior Vice President of Finance and
Marketing at NFI, to discuss their views on the evolution of e-commerce
fulfillment, NFI’s warehousing and fulfillment businesses, and the M&A industry
as it relates to logistics.
NFI is a fully integrated North American supply chain solutions provider
headquartered in Camden, N.J. Privately held by the Brown family since its
inception in 1932, NFI generates more than $2.6 billion in annual revenue and
employs over 14,500 associates. NFI owns facilities globally and operates more
than 50 million square feet of warehouse and distribution space. Its dedicated
fleet consists of over 3,000 tractors and 12,500 trailers operated by 3,000
company drivers and leveraging partnerships with 400 owner operators.
How has NFI evolved over the past five years with the rapid ascension of e-commerce?
Over the past five years, within our network our distribution centers have transformed into omnichannel facilities. What we
were shipping from our warehouses to distribution centers, we are now shipping from our warehouses to distribution
centers, stores, and direct to consumers. Furthermore, we are processing more returns with respect to e-commerce because
a large percentage of what is shipped to consumers ultimately gets returned. Consumers are buying multiples of items with
the goal of keeping one and sending the remainder back to the shipper. We are doing a lot more processing of returns
within our warehouses and fulfillment centers.
What are some of the challenges that have been created by consumer demand for faster delivery times?
The challenge we are seeing is that shippers’ networks have been disrupted. The larger shippers who have a store format are
trying to figure out how to change that store format into a combo store/fulfillment center. For small to mid-size shippers,
2020 was a very difficult time for them, especially if they did not have an e-commerce solution. What we saw was that the
big got bigger and the small to medium size shippers struggled to compete.
As a 3PL, we are working very hard with shippers to determine if those distributions centers are located in the appropriate
places in order to cut down on transportation costs and to improve speed to market. The truncation of time from two-day to
same day delivery has challenged shippers with how to balance inventory on hand (holding costs) versus making sure that
they have enough inventory to avoid a stockout in a specific location. A missed sale or getting a product a few days late for a
lot of these retailers is unacceptable because consumers are going to move on to the next best retailer.
How has NFI positioned itself to grow its market share of e-commerce fulfillment in North America?
We continue to be bullish on warehousing and e-commerce fulfillment. What we have been doing to position ourselves over
the past few years is to invest in both technology and engineering. NFI has invested in the tier-one warehouse management
systems, yard management systems and labor management systems. We feel that we have some of the best technology in
order to tap into shippers and to provide them with the visibility that they demand.
The second thing is that we have grown our engineering group and our utilization of robotics and automation. We have
talented engineers that work side by side with our shippers to lay out distribution centers to optimize efficiency between
automation and labor. Lastly, something that might be unique to NFI as a 3PL is that we have a large real estate competency.
We feel that with our competency in real estate, we can see where shippers want to be located and can get out ahead of this
need with flexible solutions.
9
Warehousing & Fulfillment | February 2021
Q&A With NFI (CONTINUED)
Do you see any trends, or shift, in the value-added services that your customers expect as their fulfillment provider?
We are seeing more of an each-picking environment that entails a lot more in terms of labeling, tagging and/or co-packing.
The second area of value-added service is reverse logistics but it depends on the shipper and how they handle reverse
logistics. There are a lot of retailers and apparel companies whose returns are going back to one of our distribution centers
or warehouses.
Then you must decide on what to do with these products. Do you put it back in inventory, scrap it, or wholesale it? We spend
a lot of time thinking about how to process those returns in the most efficient and effective way to maximize value of
returned products when they come back into our warehouses and fulfillment centers.
Could you provide some color or thoughts on the M&A market as it relates to warehousing and fulfillment? Do you
expect the market to remain hot in 2021?
I see 2021 as being a very good M&A market for logistics in general and specifically warehousing and fulfillment. There is a
larger emphasis on having agile supply chains and 3PLs will fair well because of that.
Our M&A strategy mainly focuses on founder-owned or family-owned business. These owners went through a lot this past
year and many of them might be thinking about a liquidity event if they do not have a succession plan in place. NFI wants to
be involved with family-owned reverse logistics companies located in logistics hubs. There are a lot of good companies, with
NFI being one them, that had great 2020s because of their alignment with essential customers. Reverse logistics is a concept
that is moving quickly. This will be a focus area of NFI and we love warehousing and fulfillment and will continue to look for
good deals out there that will add some size, scale, and industry specializations to our portfolio. We are focused on logistics
businesses located in the United States and Canada.
TJ Lynch has been with NFI since 2010 and leads corporate finance functions including financial planning and
business analytics, mergers and acquisitions, certain administrative functions, and special projects. In addition,
TJ oversees NFI’s marketing efforts which focus on business line sales support, brand awareness, digital
marketing, and corporate events such as the Customer Advisory Board.
Prior to joining NFI, TJ was a Senior Manager in the Transaction Advisory Services Group at Ernst & Young,
where the practice focused on financial diligence for mergers and acquisitions. At E&Y, TJ advised large public
companies, private equity firms, and middle market companies in the US, Canada, and Europe.
Contact Mr. Lynch at tj.lynch@nfiindustries.com
10Warehousing & Fulfillment | February 2021
SELECT TRANSACTIONS
Enterprise EV / LTM
Date Target Acquirer Target Business Description Value (mm) Revenue EBITDA
Offers reverse logistics services, including returned
01/28/21 Recommerce Group Cannagistics Inc. - - -
return center services, and remanufacturing.
Ridgemont Equity Provider of transportation, logistics, forwarding, and
01/07/21 SEKO Worldwide - - -
Partners warehousing services.
Moulton Logistics Provides fulfillment, retail distribution, promotional
12/23/20 Amware Fulfillment - - -
Management distribution, and mailing services.
Stellex Capital Provides warehousing and distribution services in
12/10/20 Weber Logistics - - -
Management addition to drayage, consolidation, and transload.
Provider of third-party logistics and transportation
12/09/20 NonstopDelivery Hub Group, Inc. $94.5 - -
services.
Engages in the distribution of toys, games, and other
11/12/20 Optimum Fulfillment Flat River Group - - -
consumer products.
Visible Supply Chain Operates as a logistics and fulfillment company
07/07/20 TriCon - - -
Management headquartered in Dallas.
Provides warehousing, fulfillment, and fulfillment
04/28/20 BGS Fulfillment NovEx Supply Chain - - -
services.
Fulfillment Services Comprises a business division that offers warehousing
03/20/20 Ruby Has - - -
of EasyPost to receiving, pick-packing, and shipping services.
Offers warehousing, transportation, home delivery,
03/17/20 Innovel Solutions Costco Wholesale $998.0 - -
freight/carrier and end-to-end custom solutions.
Offers last-mile delivery, dispatch, simple and complex
03/02/20 NAL Group CRST International - - -
installation, warehousing, and direct fulfillment services.
Offers fulfillment and e-commerce solutions for retail,
02/19/20 Performance Team A.P. Møller - Mærsk $545.0 1.0x 6.1x
wholesale, and omni-channel customers.
RPM Consolidated Odyssey Logistics & Offers freight forwarding, storage, warehousing, trans
01/30/20 - - -
Services Technology loading and cross docking and fulfilment services.
Prime Distribution C.H. Robinson Provides warehousing, cross-docking, packaging, and
01/28/20 $222.7 2.1x -
Services Worldwide multi-vendor freight consolidation services.
All Assets Of Sid
The Chefs' Comprises specialty food products fulfillment business
01/27/20 Wainer $50.5 - -
Warehouse in the Northeast.
& Son
Advantage Media Offers third party fulfillment, returns processing, reverse
01/21/20 EchoData Services - - -
Services logistics, and inventory management solutions.
Offers supply chain, inventory, and warehouse
01/14/20 LeSaint Logistics TAGG Logistics management along with transportation and fulfillment - - -
services.
Greenbriar Equity
Provides webtracking, e-Commerce, warehousing and
01/07/20 Air-City Group; SEKO - - -
distribution, and pick and pack services.
Enterprises
Provides transportation, and warehousing and
12/03/19 Veeco Holdings STG Logistics - - -
fulfillment services in the US.
Milan Supply Chain Wellspring Capital Specializes in truckload transportation, logistics,
09/18/19 - - -
Solutions Management warehousing/storage consolidation, and fulfillment.
Assets of Great
Jet Mail Services,
08/20/19 Lakes Fulfillment Assets offer fulfillment services. - - -
Incorporated
Services
06/20/19 Fusion Transport Hudson Hill Capital Offers logistics services. - - -
Advantage Media Provides third party warehouse management, order
05/07/19 Fort Point Capital - - -
Services management, and fulfillment services.
Source: Capital IQ, PitchBook, FactSet, and Capstone Research
11Warehousing & Fulfillment | February 2021
SELECT TRANSACTIONS (CONTINUED)
Enterprise EV / LTM
Date Target Acquirer Target Business Description Value (mm) Revenue EBITDA
Whiplash Port Logistics Provides storage and shipping services for products on
04/24/19 - - -
Merchandising Inc. Group demand for e-commerce companies.
International Offers complete front end e-commerce shipping
Rakuten Super
03/26/19 Fulfillment solutions and integrated e-commerce fulfillment - - -
Logistics
Solutions/ IFS360 services.
The Related
03/13/19 Quiet Logistics Companies; Provides e-Commerce fulfillment services. - - -
Greenfield Partners
Offers distribution and fulfillment, contract packaging,
Harkness Capital
03/13/19 Kane Logistics cross docking, and transportation management - - -
Partners
solutions.
DSI Warehouse & Provides storage, pick up and packaging, assembling,
01/14/19 Houston-Johnson - - -
Storage kitting, container handling, and fulfillment.
Provides fulfillment, warehousing, order processing,
12/12/18 FulfillPlus Balwa Group - - -
kitting, assembly, and shipping services.
Offers integrated logistics solutions to retailers and
11/05/18 CaseStack Hub Group $252.1 1.0x 11.5x
CPG companies.
Sunteck Transport Offers trucking, forwarding, supply chain, warehousing
10/09/18 HA Logistics - - -
Group and fulfillment services.
Iron Mountain
10/02/18 Amware Fulfillment Provides marketing production and fulfillment services. - - -
Fulfillment Services
Provides third party logistics services for mid-sized
08/31/18 TAGG Logistics Dot Family Holdings - - -
healthcare and consumer products businesses.
New Age
Evans Delivery Offers third-party freight, warehousing, and
06/11/18 Transportation and - - -
Company fulfillment services.
Warehousing
Provides logistics and supply chain
06/07/18 DSC Logistics CJ Logistics $240.1 0.4x -
management services.
Provides last-mile e-commerce delivery solutions
04/16/18 Lasership Greenbriar Equity - - -
through an integrated hub-and-spoke network .
Provides logistics services for home delivery and retail
04/03/18 MXD Group Ryder System $120.0 - -
replenishment.
Provides production line support, inventory
03/23/18 Trinity Logistics Agrisolutions - - -
management, warehousing, and fulfillment services.
International Transactions
07/17/20 Mobiltron France Cordon Electronics Offers e-commerce logistics services. - - -
ASAP Log Soluções
04/27/20 VVLog Logística Provides logistics services to e-commerce businesses. - - -
em Logística
Rhenus Provides international freight forwarding, warehousing,
01/08/19 CML - - -
Warehousing multichannel fulfillment, and value-added services.
Aramex Global Offers logistics, transportation, and shipping services
12/18/18 Australian Postal $33.3 - -
Solutions for the e-commerce industry.
09/07/18 Alpha Direct Services Hopps Group Offers E-commerce logistics solutions. - - -
Provides warehousing, response handling, fulfilment,
09/04/18 S&H DSV Panalpina - - -
and returns handling.
Source: Capital IQ, PitchBook, FactSet, and Capstone Research
12Warehousing & Fulfillment | February 2021
TRANSPORTATION & LOGISTICS TEAM
Burke Smith
Managing Director, Head of Transportation & Logistics
bsmith@capstoneheadwaters.com | 310-872-0038
Burke is the Head of the Transportation & Logistics practice at Capstone Headwaters and is based in the
Denver office. Burke joined the firm in 2014, bringing to Capstone Headwaters 19 years experience
as an advisor to or leader of middle market companies. Most recently, Burke ran several asset-based
trucking and warehousing operations, and previously managed an 8-state last mile delivery network.
Over his career to date, Burke has executed more than 45 transactions with a combined
value in excess of $40 billion. Burke began his career working on Wall Street. He initially
trained at Wasserstein Perella & Co., where he worked directly for famed M&A banker Bruce Wasserstein.
Burke then joined Donaldson, Lufkin & Jenrette (DLJ) as an early member of the firm’s Exclusive Sales
Group, which became one of the most successful middle market sell-side advisory practices on Wall
Street. Following the acquisition of DLJ by Credit Suisse, Burke joined UBS as an Executive
Director in the mergers and acquisitions group. Burke earned a Law degree from Harvard Law School,
and an MA and BA from Stanford University.
Jay Mercier
Vice President
404-934-6362 | jmercier@capstoneheadwaters.com
Jay serves as a Vice President in Capstone Headwaters’ Transportation & Logistics coverage group. He
brings over 10+ years of capital markets experience that spans investment banking, credit trading and
equity derivatives trading. Prior to joining Capstone Headwaters, Jay worked as a Director at Cowen
where he was a member of the Outsourced Trading Team. He was responsible for the account coverage
of institutional buy-side accounts and advised clients on risk mitigation strategies with the use of
exchange-traded derivatives. Jay earned a BA from the University of Georgia and an MBA from the
Georgia Institute of Technology.
Nathan Feldman
Associate
845-416-5906 | nfeldman@capstoneheadwaters.com
Nathan joined Capstone Headwaters in 2015 and while he has held multiple different roles at the firm, he
currently works as an investment banking Associate on the firm’s Transportation & Logistics team. His
responsibilities primarily include helping middle market business owners throughout the industry execute
exit, recapitalization, and capital raise transactions.. Nathan earned his BA from Brandeis University with a
degree in English, Business and Physics.
2020 2020 2019 2019 2019
MIDDLE MARKET US MIDDLE MARKET
INVESTMENT BANKING FIRM INVESTMENT BANKING FIRM INVESTMENT BANKING FIRM
INVESTMENT BANK INVESTMENT BANK
OF THE YEAR OF THE YEAR OF THE YEAR
OF THE YEAR OF THE YEAR
INTERNATIONAL AWARDS TURNAROUND AWARDS
13Warehousing & Fulfillment | February 2021
CITATIONS
1. Statista, “Retail E-Commerce Sales Worldwide From 2014 to 2023,”
https://www.statista.com/statistics/379046/worldwide-retail-e-commerce-sales/
2. Seeking Alpha, “Shopify Inc. (SHOP) CEO Tobi Lutke on Q2 2020 Results –Earnings Call Transcript,”
https://www.seekingalpha.com/article/4361920-shopify-inc-shop-ceo-tobi-lutke-on-q2-2020-results-earnings-call-
transcript
3. Business Wire, “Walmart U.S. Q1 comp sales1 grew 10.0% and Walmart U.S. eCommerce sales grew 74%, Q1 FY21
GAAP EPS of $1.40; Adjusted EPS2 of $1.18, Company incurs incremental costs related to COVID-19 of nearly $900
million, Provides update on the business amid global health pandemic,”
https://www.businesswire.com/news/home/20200519005526/en
4. XPO Logistics, “XPO Logistics Announces Plan to Spin Off Logistics Segment to Its Shareholders,”
https://www.investors.xpo.com/static-files/e04f3e02-1e83-4a98-b0f8-4c85c7fe1679
Disclosure: This report is a periodic compilation of certain economic and corporate information, as well as completed and announced merger and acquisi-
tion activity. Information contained in this report should not be construed as a recommendation to sell or buy any security. Any reference to or omission of
any reference to any company in this report should not be construed as a recommendation to buy, sell or take any other action with respect to any security of
any such company. We are not soliciting any action with respect to any security or company based on this report. The report is published solely for the
general information of clients and friends of Capstone Headwaters. It does not take into account the particular investment objectives, financial situation or
needs of individual recipients. Certain transactions, including those involving early-stage companies, give rise to substantial risk and are not suitable for all
investors. This report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied
upon as such. Prediction of future events is inherently subject to both known and unknown risks and other factors that may cause actual results to vary
materially. We are under no obligation to update the information contained in this report. Opinions expressed are our present opinions only and are subject
to change without notice. Additional information is available upon request. The companies mentioned in this report may be clients of Capstone Headwaters.
The decisions to include any company in this report is unrelated in all respects to any service that Capstone Headwaters may provide to such company. This
report may not be copied or reproduced in any form, or redistributed without the prior written consent of Capstone Headwaters. The information contained
herein should not be construed as legal advice.
14BUILT FOR THE MIDDLE MARKET
Capstone Headwaters is one of the largest and most active independent investment banking firms in the United States. The
firm has a rich, 20-year history of achieving extraordinary results for middle market entrepreneurs, business owners, investors,
and creditors. Capstone offers a fully integrated suite of corporate finance services, including M&A, debt and equity
placement, corporate restructuring, valuation and fairness opinions, financial advisory, and ESOP advisory services.
Headquartered in Boston, the firm has 175+ professionals across 16 offices in the U.S., and an international presence
including over 450 professionals in 40 countries. With 16 dedicated industry groups, the firm delivers sector-specific expertise
through large, cross-functional teams on a global basis.
UNITED STATES
170+ professionals
17 offices
INTERNATIONAL
Boston Burlington Chicago Dallas
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Richmond San Diego San Francisco
St Louis Tampa Washington DC Asia: China India Japan
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Hungary Ireland Italy London Netherlands Norway Poland Russia Serbia Slovenia
Spain Sweden Switzerland Turkey United Kingdom
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