DSV Looks Into Next Krone Bond Issue After June Debut, CEO Says

DSV A/S, the Nordic region’s biggest trucking company, is looking into the possibility of selling more bonds after it issued its first krone note in June to take advantage of cheaper funding, its chief executive officer said.

“It’s an interesting market for us and a market we’re tracking,” CEO Jens Bjoern Andersen said in an interview. “Going to the bond market was a good experience. We’re not ruling out that we’re going back.”

DSV, founded by 10 truckers in 1976, has expanded through acquisitions to become Denmark’s fifth-biggest listed company by revenue. Its debt peaked at 9.54 billion kroner ($1.7 billion) at the end of 2008, when it bought Brussels-based ABX Logistics Worldwide SA. The Broendby, Denmark-based company last week said its net debt declined to 6.53 billion kroner at the end of June, 2.8 percent down from a year earlier.

DSV on June 17 issued a 3.5 percent 1 billion-krone bond due 2020 to pay off more expensive bank loans. The bond yielded 3.7 percent today, down from a June 24 peak of 4 percent, according to Nordea Bank AB prices compiled by Bloomberg.

The bond has extended the average maturity of DSV’s debt to about 4.4 years, which is a “comfortable” level, Andersen said.

“If we were to go back, it wouldn’t be to extend the maturity of our debt, but rather to save interest costs,” he said.

Takeover Targets

DSV, which this year has bought companies in Columbia, Denmark and Norway, is still pursuing acquisitions and targets firms with annual revenue of as much as 4 billion kroner, Andersen said. The company won’t need to tap the bond or the stock markets to finance takeovers, he said.

“We would be able to finance such acquisitions via cash flow from our revenue,” Andersen said. “It makes sense for us to pursue acquisitions as the prices on some of our targets are better. The asking prices are not as optimistic as they used to be, so the multiples we would have to pay are now fairer.”

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