Serial Acquirers Market Update: Mullen Group Warns of Macroeconomic Headwinds and Canada’s Reach Expands Global Footprint with Primus Capital Partnership
Mullen Group Expects a Range-Bound Economy and Reach Continues International Growth with Primus Capital’s Expertise
Mullen Group Warns of Macroeconomic Headwinds in its Q4 2024 Earnings
Earlier this month, Mullen Group, one of Canada’s largest logistics serial acquirers providing transportation, warehousing, and distribution services in North America, reported its Q4 and 2024 fiscal year-end earnings. Despite challenging market conditions with soft demand and pricing pressures, the company maintained flat year-over-year revenue.
Mullen Group painted a cautionary picture of the year ahead, with management expecting a range-bound Canadian economy at best and downside risks relating to trade tensions between Canada and the U.S. The company cited its prudent use of capital, strong balance sheet, and diversified portfolio of business units as factors that will offset some of the macroeconomic headwinds.
Mullen Group’s stock price has hovered between $12.50 and $16.00 over the past few years. While the company has struggled with growing revenues over this period, it trades at a modest P/E of 11 and pays a dividend yield of 6.3%.
Crucially, the company’s outlook serves as a warning for Canadian serial acquirers to be more rigorous in their capital allocation strategy and use of leverage. With significant uncertainty in tariff policies and their ripple effects on the Canadian economy, Canadian serial acquirers should be defensively positioned and conduct scenario analysis on how they might be impacted by shifts in macroeconomic policies.
Disclosure: I own shares in Mullen Group
Reach Expands Global Footprint with Primus Capital Partnership
Calgary-based e-commerce platform Reach has expanded its global presence following the acquisition of a majority stake by Primus Capital, an American private equity firm. Reach assists mid-market and enterprise e-commerce retailers, as well as SaaS businesses, in selling their products internationally. With Primus’ involvement at the board level and additional funding, Reach is set to scale its operations, broaden international coverage, accelerate product development, and enhance payments, tax compliance, and fraud protection.
Currently operating in Canada, the US, the UK, and Australia, with plans to enter Japan and the UAE, Reach has diversified its customer base since 2022. Reach CEO Sam Ranieri noted that despite challenging conditions in the FinTech market, Reach had multiple offers but felt Primus was the best choice due to its expertise in the FinTech space.
As U.S. tariffs on Canadian goods are now in effect for many businesses, Reach stands out as an option that helps customers by ensuring transparency and visibility on additional costs and duties at the point of sale.
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