CEVA Logistics, a leading global third-party logistics (3PL) provider, has successfully completed a comprehensive financial restructuring that significantly strengthens its balance sheet and positions the company for future growth in the competitive logistics market.
Strategic Financial Restructuring
The company announced an agreement with major bondholders to restructure its balance sheet while securing new capital investments. This dual approach addresses both debt reduction and growth financing needs.
The restructuring achieves several key financial objectives:
• Net debt reduction exceeding $1.5 billion (approximately €1.2 billion)
• Annual interest expense savings of more than $173 million (approximately €135 million)
• New capital infusion of at least $264 million (approximately €205 million)
The agreement received support from holders of approximately 83% of the company's 2020-dated 12.75% senior notes and 69% of the 2018-dated 11.5% second lien notes.
Strategic Investors Join as Major Shareholders
Three institutional investors - Apollo Global Management (CEVA's owner), Capital Research and Management Company, and CEVA's largest capital investor - committed approximately $264 million in new capital. Upon completion of the restructuring, these investors will become CEVA's largest shareholders.
CEO Outlines Competitive Advantages
Marv Schlanger, CEVA's Chief Executive Officer, emphasized how the restructuring enhances the company's market position: "This transaction enables us to invest more flexibly in capital expenditures to serve our global customers and develop new supply chain products."
Schlanger noted the importance of meeting evolving customer demands: "Our clients increasingly require greater transparency, visibility, traceability and control across their supply chains. We'll allocate part of our resources to enhance IT capabilities that address these needs."
The CEO characterized the investor participation as "third-party validation" of the company's management team and business strategy.
Next Steps in Restructuring Process
CEVA plans to issue an offering memorandum to bondholders proposing a debt-for-equity swap. The exchange offer will remain open for 20 business days (30 calendar days), with completion expected in early May.
2012 Financial Performance
The company reported preliminary unaudited 2012 results showing record revenue of $9.3 billion (approximately €7.2 billion), a 4.8% year-over-year increase. However, adjusted EBITDA declined 21.8% to $322 million (approximately €251 million).
Freight management operations grew 6%, with strong ocean freight performance across all regions offsetting declining European air volumes. Contract logistics EBITDA fell 24.4%, primarily due to economic challenges in Southern European markets.
IPO Plans Temporarily Shelved
CEVA withdrew its $400 million initial public offering application originally filed in May 2012. Chief Financial Officer Rubin McDougall previously described the filing as an "administrative step" to preserve the IPO option without committing to specific timing or size.
The financial restructuring positions CEVA Logistics for improved competitiveness in the evolving global logistics market, with enhanced capacity to invest in technology, network expansion and service innovation.