Benesch 2024: Potential Impact of Pent-Up Dollars on Logistics M&A
The Benesch private equity in transportation conference, held annually in December, is a crucial event where key private equity, venture capital, and general dealmakers gather to discuss the state of the market for buying and selling logistics companies. In the past few years, the freight market has seen both peaks and valleys, leading experts to caution potential sellers about realistic valuations.
However, the 2024 conference seemed to signal a shift in sentiment. Experts believe that the market for logistics and transportation properties has hit bottom, and there is a significant amount of capital waiting to be invested. Despite uncertainties about the 2025 market due to changes in political governance, private equity firms are sitting on a large sum of “dry powder” – around a trillion dollars, to be exact.
On the M&A Outlook panel for 2025, Kristopher Hopkins, managing director at BMO Capital Markets, highlighted the urgency for private equity firms to redeploy their funds. With lackluster performance in 2023 and 2024, experts predict only a slight uptick in the market next year. Nevertheless, there is an air of “frustrated optimism” among investors, with many companies prepared to enter the market after investing in automation, equipment upgrades, and fair compensation for employees.
Jonathan Adams from Capstone Partners echoed a similar sentiment, stating that buyers and sellers are both eager to make moves in the market. While some private equity funds are ready to deploy significant capital, others are looking to divest from longstanding portfolios. This convergence of factors could create opportunities for both sellers and buyers in the industry.
Mark Fornasiero of Clarendon Capital acknowledged the challenging M&A market in recent years but found success by focusing on niches that weathered the storm better than others. These niches, particularly in specialized logistics fields such as wine and spirits, have shown resilience during tough economic times.
As discussions at the Benesch conference often circle back to the importance of realistic valuations, Paul Martins from Ascent Global Logistics emphasized the need to avoid fixating on high-priced niche acquisitions. While success stories are inspiring, they may not represent the norm in the market. Caution and a balanced approach will be key for stakeholders navigating the complex landscape of logistics M&A in the upcoming year.
