Metro Supply Chain Inc., one of Canada’s largest logistics companies with over 190 sites across North America and the U.K., is being sold to Japanese firm Nippon Express Holdings Inc. (NX Group) in a transaction which values the Montréal-based firm at up to $2.2 billion.

NX Group is one of the largest logistics firms in the world, with over 78,000 employees and operations across 57 countries. Metro Supply Chain has approximately 9,000 employees and operates a portfolio of 22.5 million square feet of logistics and support space. 

"This transaction gives Metro Supply Chain access to additional scale and investment, while allowing us to continue operating the business as we do today," said Chris Fenton, group president and CEO of Metro Supply Chain, in the announcement Friday morning. "Our leadership remains in place, and our focus continues to be on delivering for our customers. 

“For our customers, this means continuity, with the same teams, no changes to service or existing agreements, and over time, the benefit of increased scale and investment."

Protections for Québec office, employees

While no specifics have been provided, the announcement states Metro Supply Chain is to continue operating as usual with no disruption to business “until completion” of the deal. The release also states NX Group has offered “firm commitments” it “shall not materially downsize the head office workforce based in Québec, nor relocate a material portion of the management workforce located in Québec.”

The existing management team and headquarters are to be maintained in Montréal, where Metro’s global head office is located. Metro Supply Chain is owned by majority shareholder LDC Metro Holdings Inc., and Québec-based pension investor La Caisse.

"Our philosophy has always been to build strong businesses alongside exceptional management teams and long-term partners," Chiko Nanji, founder and group chair of Metro Supply Chain and chair of LDC, said in the release. "Metro exemplifies that approach - earning the trust of its people, customers, and partners through a focus on relationships, operational excellence, and culture. 

“This transaction recognizes the strength of what has been built and positions the company for its next phase of growth with a global partner that shares our values. With greater resources, and a global network, Metro is well positioned to deepen its presence in Canada, the U.S. and the U.K. and expand into new markets."

Nanji is to remain on the company’s board, according to the announcement.

The transaction is subject to customary regulatory approvals and is expected to close in the coming months.

Metro Supply Chain and NX Group

Over more than five decades, Metro Supply Chain grew from a single warehouse in Montréal into a supply chain solutions provider operating across Canada, the U.S. and the U.K.

"La Caisse has supported Metro Supply Chain's growth and evolution since its initial investment in 2018, a partnership marked by successive reinvestments and strong returns for its depositors," said Kim Thomassin, executive vice–president and head of Québec at La Caisse, in the announcement. "The commitment to maintain the head office of this Canadian logistics leader in Québec, along with its management team and local workforce, was a key factor for us."

NX Group was founded in 1937, and is a publicly listed global logistics group. It operates with a holding company structure, an approach which aligns closely with Metro Supply Chain's operating model.

"Metro Supply Chain represents a strong strategic fit for our group," said Satoshi Otsuji, senior managing executive officer of Nippon Express Holdings, in the release. "Its capabilities, customer relationships, and market position in North America complement our global network and long-term growth strategy. We look forward to supporting Metro Supply Chain's continued development while respecting its local leadership and strengths."

LDC Metro Holdings Inc. is a diversified holding company founded in 1974, which invests in logistics companies and businesses directly related to the logistics industry. In addition to its operating investments, LDC owns, manages and develops residential, commercial, hospitality and industrial real estate assets.

J.P. Morgan served as financial advisor, while Osler was the legal advisor to Metro Supply Chain regarding the transaction. Stikeman Elliott acted as legal advisor to LDC, and Borden Ladner Gervais LLP acted as legal advisor to La Caisse.