DSV and ABX Logistics join forces

The transaction sees DSV acquire all of the shares of XB Luxembourg Holdings 1 S.A., the parent of the ABX Logistics Worldwide SA/NV Group (ABX) of Belgium. The aggregate price of the entire share capital, on a debt and cash free basis (Enterprise Value) is €750.0 million (DKK5.6 billion). The acquisition is to be financed by raising loans with the current financing partners of the DSV Group. The transaction is expected to complete in the third quarter of 2008 and is subject to approval by the relevant competition authorities.

Highlights:

• €750 mn deal
• 2007 pro forma revenues of €6.5 bn
• Enlarged Group has 25,000 employees ≥ Complimentary fit geographically
• Doubles Air & Sea operations and strengthens key road transport markets

For 2007, DSV and ABX had pro-forma combined aggregate annual revenues of approximately €6.5 billion (DKK48.5 billion) with approximately 25,000 employees, and operated transport networks spanning more than 60 countries.

The acquisition will significantly strengthen the market position of the enlarged group in their core businesses. For DSV, Air & Sea will almost double in size and the acquisition will strengthen DSV's Road activities mainly in Italy, Germany, France, and Spain. Historically the size of DSV has been modest in those four large European countries. The merged company will also be better positioned to counter the increasing competition including from new Asian players.

The deal is seen as complimentary, in geographic terms, between the Northern European presence of DSV and the South & Western Europe presence of ABX. ABX also has activities in Asia, North America, South America, and Africa. It also goes some way to fulfil DSV's strategy to establish critical mass in key markets. DSV is committed to continuing to grow each of its three core business areas and it has been an intention of DSV for a long period of time to strengthen, and preferably double, the revenue generated from Air & Sea activities.

According to 3i, ABX today is a fundamentally different and better business than it was five to six years ago. Led since March 2003 by Mr. Laurent Levaux, CEO of ABX, the Company has refocused its business on core activities Air & Sea, European International Road transport and Contract Logistics.

In the coming months, DSV and ABX will draw up a plan for the integration of the activities of the two companies which will implement the provisional business and synergy case. This will be carried out by collaboration between the managements of the two organisations. Mr. Laurent Levaux, the CEO of ABX, will be proposed as candidate for the position of Deputy Chairman of the Board at the next annual general meeting. The synergies are expected to be fully implemented before the end of 2011, when the margins of ABX are expected to be on a level with the margins realised by the various divisions of the DSV Group.

As part of the terms of the agreement, the ABX Headquarters will be maintained in Brussels through at least 2011. It is the firm intention of the new group to continue to develop its operations in Belgium.

Headquartered in Brussels, ABX is a global freight forwarder. The Group achieved consolidated revenues of €1.8 billion in 2007, employs 6,700 FTE in 35 countries and operates in 65 other countries through agents, partners and joint-ventures. ABX offers air and sea freight forwarding services globally and international road transport in Europe. It also provides Contract Logistics Solutions in Europe. ABX has a particularly strong presence in Western and Southern Europe, and has a leading position in Italy under the name of Saima Avandero. It also operates an extensive and strong network in Asia-Pacific and in the Americas. Its Air & Sea activities achieved a turnover of over €1.3 billion in 2007 which places ABX among the top European Air & Sea freight forwarders. According to its consolidated financial statements for 2007, the ABX Group achieved EBITDA of €54.0 million and EBITA of €31.9 million (an EBITA margin of 1.7%).

ABX was created by NMBS/SNCB Holding, the Belgian state-owned railways group, from the combination of several long-standing European transport and logistics businesses, the oldest of which started in 1746 in Italy. NMBS/SNCB embarked on an acquisition strategy from 1998 to 2001. Key acquisition included Bahntrans and Thyssen Haniel Logistics in Germany, Saima Avandero in Italy and Dubois in France. Each company had an important market share in its respective market and offered a broad spectrum of services in freight forwarding, logistics, and international and domestic road transport.

In November 2004, 3i entered into exclusive negotiations with NMBS/SNCB for the acquisition of ABX and in March 2005 a binding Memorandum of Understanding was entered into. The acquisition of ABX was subject to the approval of NMBS/SNCB's past financial contributions to ABX being approved under the EU State Aid Rules. The clearance was received in December 2005 and the acquisition by 3i, ABX Management and the other shareholders completed in August 2006. Since then, management strategy has focused on the deployment of a fast-growing core international freight forwarding platform and the restructuring and divestment of non-core businesses.