As Brink's Co. Talks of Selling BAX Global, Shares Rise Significantly

Shares of The Brink's Co. climbed Monday after talk resurfaced in published reports that the armored-car operator could sell its heavy-freight delivery unit, BAX Global, to Germany's Deutsche Bahn AG.

According to the Financial Times Deutschland, company sources said any deal would be finalized after Deutsche Bahn's board meets Saturday.

Shares of the Richmond, Va.-based company climbed as high as $47.39, surpassing the 52-week high of $42.85 reached Thursday.

By afternoon the shares had settled somewhat and were trading at $46.53, up 9.5 percent, or $4.03 on the New York Stock Exchange.

Officials at Brink's had no comment on whether BAX would be bought.

According to a Reuters article Monday, Deutsche Bahn is likely to pay between 800 million euros ($945.8 million) to 1 billion euros ($1.2 million) for BAX Global, citing people familiar with the negotiations.

The Wall Street Journal reported in June that a sale of BAX Global could fetch about $500 million, based on a rough 10-times price-to-cash flow multiple commanded by public logistics and trucking companies.

BAX Global moves heavy cargo around the world, through a network of 500 offices in 133 countries, using its own 18-plane air fleet as well as trucks and ships under contract.

With more than 11,000 employees, the unit notched sales last year of $2.4 billion.

The BAX unit has struggled to turn a profit, delivering just $56 million in operating profit in 2004, and a combined $21 million in profit in the two years previous.

Selling the transport unit would allow Brink's to focus more on its home-security division, the second largest in the United States.

That unit reported last year operating profit margins of 23.4 percent, far greater than the 3.6 percent delivered by BAX Global.

UBS analyst Steven Fisher said Monday in a note to investors that BAX represented 52 percent of Brink's' total sales and 24 percent of segment profit.

BAX Global is a corporate descendant of the Burlington Northern railroad, which created an air-freight division purchased by Brink's in 1982. The unit was renamed BAX Global in 1997.


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