DP World buys Danish logistics company Unifeeder for €660m
The Dubai-based port operator is expanding into the shipping business
DP World acquired Danish port-related logistics company Unifeeder for €660 million (Dh2.8 billion), the company's first purchase of its kind, as the world's fourth largest port operator expands into shipping.
The deal is subject to regulatory approvals and will be financed from “existing balance sheet resources” the Dubai-based company said on Tuesday in a statement to Nasdaq Dubai, where its shares are listed. The transaction, which is expected to close by the fourth quarter of this year, will help boost earnings in the first full year after completion of the takeover. DP World bought the company from Nordic Capital Fund VIII and certain minority shareholders.
“The ever-growing deployment of ultra-large container vessels has made high-quality connectivity from hub terminals crucial for our customers and Unifeeder is a best-in-class logistics provider in this space with a strong reputation in Europe,” said Sultan bin Sulayem, chairman and chief executive of DP World. “Our aim is to leverage on the in-house expertise of Unifeeder and to accelerate growth in this scalable platform to deliver value for all stakeholders.”
DP World has been on an acquisition spree this year, buying different assets and signing concession agreements to help diversify its revenue and expand its business segments.
The Unifeeder acquisition "is a new segment but it is not moving away from their strategy to acquire companies that are complimentary to their business," said Ahmed Maher, an analyst with Egyptian investment bank EFG-Hermes. "What Unifeeder gives them is access to smaller ports that they don’t own, for example, and that major shipping lines can’t access as well."
The port operator reported an increase in first-half container volumes, bolstered by growth in its Europe and Australia terminals, despite geopolitical challenges and trade policy changes creating uncertainty in the market.
Gross container volumes grew 4.8 per cent on a reported basis in the first six months of the year compared to the same period in 2017 and 6 per cent on a like-for-like basis, which does not include new capacity additions.
Founded in 1977, Unifeeder has an extensive feeder and growing shortsea network in Northern Europe with connectivity to approximately 100 ports, the DP World statement said. The Danish company reported 510m euros in revenues in 2017.
Aarhus-based Unifeeder operates approximately 60 short-term chartered vessels, carrying around 3.2m twenty-foot equivalent units and performing some 12,000 port calls annually.
“The acquisition of Unifeeder will further enhance DP World’s presence in the global supply chain and broaden our product offering to our customers - the shipping lines and cargo owners – with a view to ultimately reduce inefficiencies and improve the competitiveness of global trade,” DP world said in the statement. “The current operations of Unifeeder are complementary to DP World’s existing business and provides future growth opportunities.”
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Updated: August 7, 2018 02:46 PM