By Patrick Burnson, Executive Editor ·
September 6, 2017
Pitney Bowes announced that it has signed a definitive agreement to acquire Newgistics, Inc.(Newgistics), an Austin, Texas-based provider of parcel delivery, returns, fulfillment and digital commerce solutions for retailers and ecommerce brands.
The acquisition is designed to accelerate Pitney Bowes’ expansion into the U.S. domestic parcels market at scale, enabling the company to deliver a broader range of consumer-focused ecommerce and parcel management solutions to retailers, small and medium businesses, and enterprise clients.
Fitch Ratings views the acquisition “positively,” given Newgistics’ strategic fit with PBI’s ongoing investment in the global integration of mail and parcel processing.
“These areas offer significant growth opportunities as exhibited by PBI’s recently released Parcel Shipping Index, which showed a 48% increase in global parcel volume over the last two years and an estimated 17% to 28% annual growth through 2021,” stated a Fitch senior analysts. “Newgistics’ focus on order fulfilment, nationwide parcel delivery and return, and managing digital commerce ecosystems enhances PBI’s existing global ecommerce offerings while also enhancing and broadening PBI’s domestic ecommerce and presort offerings.”
Analysts added that the acquisition should also provide significant synergy opportunities given the complementary nature of the businesses and minimal customer base and business focus overlap.
Under the terms of the definitive agreement, Pitney Bowes will purchase all shares of the privately held company for approximately $475 million. The acquisition of Newgistics meets all of the financial criteria for acquisitions that the Company has previously presented. The transaction is expected to close by late third or early fourth quarter subject to customary closing conditions. It is Pitney Bowes’ intention to continue to operate the businesses as independent units through the remainder of 2017 and into the first quarter of 2018 to avoid any disruptions during the busy holiday shipping season.
Newgistics, best known for its returns-processing capabilities, provides a range of ecommerce solutions on behalf of nearly 500 retail clients. It is a workshare partner of the United States Postal Service (USPS) and processes nearly 100 million parcels annually, including more than 50 percent of all Parcel Returns Select packages shipped through the USPS. It’s parcel services and ecommerce logistics network includes nine operating centers and an asset-light national transportation network of more than 50 partners.
September 6, 2017
About the Author
Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]
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