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Brazil's Modern Logistics aims to United States, Mexico, M&A for expansion

Brazilian cargo business Modern Logistics expects to get in the U.S. and Mexican markets in the next few months as it puts in location an expansion technique that will include looking at merger and acquisition opportunities in the brief to midterm.

WHY IT is necessary

Modern is a big player in the fast-growing cargo market in Latin America's largest economy, which has actually been increased in recent years by e-commerce and facilities financial investments.

RESTRUCTURING

Established in the 2010s by former Azul executives, Modern underwent a restructuring last year that saw previous FedEx executive Cristiano Koga selected as CEO.

The company is backed by possession manager DXA and private-equity firm H.I.G. Capital. It has invested some 300 million reais ($ 53.58 million) over the past year to get brand-new aircraft and enhance distribution centers, Koga informed Reuters.

EXPANSION

Modern, whose primary center is the Viracopos airport near Sao Paulo, started flying to Chile, Ecuador, Colombia, Argentina and Uruguay in August and aims to get in Mexico and the U.S. in 2025.

The ongoing growth, whose first stage was natural, includes possible mergers or acquisitions both in Brazil and abroad in the next 18 to 24 months, Koga stated.

An initial public offering (IPO) or strategic merger might be supreme objectives, but would depend on market conditions.

ADDITIONAL CONTEXT

The size of Brazil's freight and logistics market is estimated at $105.5 billion and expected to reach $140.7 billion by 2030, according to research firm Mordor Intelligence.

Other major logistic operators there consist of the cargo divisions of traditional airlines Azul, LATAM and Gol , as well as Overall, Jadlog and Braspress.

Modern presently runs 4 Boeing 737 aircraft, including 2 next-generation 737-800 added over the previous year, and has options to add more, Koga stated.

(source: Reuters)