News / Europe may be a strong bet for US PE firms eyeing air cargo handlers

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The cargo handling sector in Europe could be shaken up by new M&A deals, as private equity-owned handlers look to extend their reach. 

The market has known for some time that Alliance Ground International (AGI), owned by Audax Private Equity and Greenbriar Equity Group, has wanted to expand in Europe, but found it challenging. 

However, this month it told Air Cargo News that it planned to enter the market this year, and had hired veteran European handler Olivier Bijaoui, founder of what is now WFS, to advise it. 

“Europe did go through a little bit of a slump, so it delayed our plans. But we’ve made a great short list of the companies we want to engage with, which we intend on executing later this year,” CEO Jared Azcuy told the media outlet. 

“We have an extensive network in the US, but now we want to expand it into Europe. 

 “We are not just acquiring a company, we’re acquiring its people, and so culture and shared values are very important to us. We did a very rigorous screening process. 

“We don’t have a presence here, so we’re going to depend on these folks to run these business units for us.” 

Europe’s cargo handling sector remains more fragmented than the US, which has seen private equity investment since about 2011 consolidating the market.  

One US-focused private equity investor told The Loadstar they liked cargo handling as an investment. 

“One business in particular handled a lot of the cargo that was in passenger aircraft, and passenger aircraft will always come to the US. 

“We still like cargo handling as a sector. What we originally liked about that opportunity was that we were coming out of a tougher economy and the market was very fragmented.  

“What I look for; is it asset light? Does it have good tailwinds? Is there something that’s going to cause good organic growth? Is it in a niche that’s quite fragmented? So, as the business grows, can we acquire smaller companies and add to our platform?   

“Cargo handling used to check all those boxes for us. I would say the only one that is a little trickier nowadays is the fragmentation part, because it’s been consolidated. There have been other folks who have acquired cargo handling and I think they’ve generally done well. But there’s fewer and fewer smaller handlers for us to invest in. There’s not as much opportunity [in the US].” 

While behemoths such as Swissport, and WFS tend to dominate the scene, their pace of  acquisitions has slowed in recent years. Swissport on average has acquired one company in Europe each year for the past five years or so; WFS, now merged with SATS, has made just one, implying there is a dearth of targets – or that Europe is no longer a region of interest for the pair. 

But there are independent cargo handlers in Europe, such as Aviapartner, which would be a strong M&A move, with more than 60 operations across the continent, while Frankfurt-based CHI Aviation is also growing. Last month, Menzies Aviation bought Spirit Cargo Handling in Norway, as it too looks to grow in Europe. 

And the market is ripe for M&A.  

According to Ti and Logisyn data this week, Europe accounted for the largest number of logistics acquisitions (by target location) last month, with 44% of all acquisitions recorded, while US companies were the most active buyers, accounting for 41% of targets. 

Growing in Europe has another advantage in the current environment. 

“We really like cargo handling,” said the US private equity investor. “But I think it’s going to go through some sort of correction with the tariffs. But long term, it still has good stability, I would say.” 

But for AGI, which has a significant presence at major international hubs such as Miami, JFK, and Chicago, and could therefore face declining volumes as trade with the US is hit with tariffs, Europe could be a stronger bet.