FedEx Corp. (FDX) said Tuesday it would acquire privately held logistics provider Genco, making a large investment in e-commerce.
Pittsburgh-based Genco specializes in reverse logistics, managing returns and repairs for online sellers in the technology, industrial, retail, healthcare and consumer markets. The company processes over 600 million return items annually via a network of more than 130 warehouse locations with a combined 38 million square feet of space, generating $1.6 billion in annual sales.
Terms of the deal were not disclosed, but a source said that FedEx likely paid between $1 billion and $2 billion for the company. Genco CEO Todd R. Peters is expected to remain at the company.
The purchase would push Memphis-based FedEx deeper into the world of e-commerce. FedEx has been pushing to grow its ground business to compete with United Parcel Service Inc. (UPS) , the world's largest package shipper, as consumers increasingly shift away from the mall and to online shopping.
FedEx chairman and CEO Frederick W. Smith in a statement said "the acquisition of Genco will transform our global portfolio through the addition of new best-in-class supply chain management services.
"As e-commerce continues to grow, customers of both companies will reap the benefits from the broadened capabilities and powerful new services," Smith said.
Genco was formed in 1898 as H. Shear Trucking Co., making horse and wagon deliveries in the Pittsburgh area. The company changed its name to General Commodities Warehouse and Distribution Co. in the 1940s, and in 2010 combined with ATC Technology Corp. in a $512 million deal.