Acquiring the Cavalier Logistics group — and abandoning growth by its own hand abroad (2023)

Not the market it bought, but the way of buying

What changed was not the market bought but the manner of buying. For more than half a century after setting up a warehouse company in California in 1970, Mitsubishi Logistics had kept to one procedure abroad: found your own company, alongside the overseas move of a Japanese shipper. That $154.4M (¥22bn) of the $175.4M (¥25bn) acquisition cost was allocated to customer-related assets shows what was taken on this time. It did not buy warehouses or equipment. It bought relationships with local customers.

It is early, though, to judge the method settled. In the year to March 2025, the first full year of contribution, signs of impairment appeared on the goodwill, and a write-down was avoided only on a finding that fair value still exceeded carrying value. In the boardroom an outside director asked to be given a proper picture of how Cavalier was being run — a sign that the acquired company’s real condition is not yet shared. The distance that would never arise with a site of one’s own is present in an acquisition from the first day. The cost of changing a pattern half a century old looks to be accumulating outside the $175.4M (¥25bn) as well.