Monthly Canadian M&A Report

Quarterly Industry Snapshot: Air Freight & Logistics

Investor Interest in the industry remains strong with M&A deal value in the LTM from Q2 2022 surpassing twice the deal value in 2019. The strong LTM is below the 2021 record level of US$219 billion.

Supply Chain Disruptions have continued to challenge companies with supply shortages and shipment delays resulting in investment in warehouse and fulfillment solutions, fueling M&A activity. Strategic investors are seeking to vertically integrate their businesses, and financial investors are seeking to maximize returns from growth opportunities due to pent-up demand.

Transportation Costs rose 22% in 2021, due to spikes in consumer demand and high inflation, according to a study done by CSCMP. These factors have inspired companies to take additional steps to defend their margins. Companies are incentivized to consolidate their supply chains. For example, the acquisition of Deliverr by Shopify enabled Shopify’s fulfillment capacity to be equivalent to Amazon’s.

Passenger Air & Ground Transportation deal values were up 8% and 143%, respectively, in the LTM from Q2 2022 compared to 2021. As COVID-19 restrictions continue to be lifted, analysts expect to see an increase in deal activity as companies look to benefit from pent-up demand post-pandemic. The competition between United Airlines and Spirit Airlines to acquire JetSuite speaks to this trend.