DP World buys Danish group for Dh2.8 billion

      08/08/2018

Global ports operator DP World announced on Tuesday the acquisition of Denmark-based Unifeeder Group for Dh2.8 billion ($764 million) from Nordic Capital Fund and certain minority shareholders.

Unifeeder, based in Aarhus, operates the largest and most densely connected common user container feeder and an important and growing short sea network in Europe, serving both deep-sea container hubs and the intra-Europe container freight market.

DP World, which operates some 80 terminals in over 40 countries, is currently embroiled in a row over a concession agreement for Djibouti's Doraleh Container Terminal. The latest acquisition is in the wake of a ruling by the London Court of International Arbitration that DP World's concession agreement over Doraleh is valid and legally binding, rendering the Djiboutian government's seizure of it illegal.

Dubai-based port operator, which got a rating upgrade on Monday from Moody's Investors Service, said the Unifeeder deal is expected to close in the fourth quarter of this year.

Unifeeder reported revenue of ?510 million in 2017. The acquisition is subject to regulatory approvals and expected to be earnings accretive in the first full year after completion.

In statement, the world's fourth biggest port operator said the acquisition would further enhance its presence in the global supply chain and broaden product offering to the shipping lines and cargo owners. "The current operations of Unifeeder are complementary to DP World's existing business and provides future growth opportunities," it said.

Sultan Ahmed bin Sulayem, group chairman and CEO, DP World, said the acquisition supports the ports operator's strategy to grow in complementary sectors, strengthen its product offering and play a wider role in the global supply chain as a trade enabler.

"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. 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," said Sulayem.

Jesper Kristensen, CEO, Unifeeder said Unifeeder would benefit from DP World's significant expertise in the wider supply chain and excellent relationships with shipping lines and end cargo owners.

"Not only is there commonality with our business models but we also share the vision of serving our customers through removing inefficiencies and delivering sustainable shareholder value. We have enjoyed great success over the last five years under Nordic Capital's ownership, and we believe that the Unifeeder brand within the DP World Group has the opportunity to accelerate growth, expand further and take the business to the next level."

DP World, which last year acquired two state-owned maritime entities in Dubai for $405 million, is looking to diversify its revenue stream by expanding into businesses related to its core ports operations. The company expects to spend about $1 billion every year for the next three years as it boosts investments, adds capacity and acquires new assets in the UAE and beyond.

In March, DP World announced the acquisition of two new assets in Peru and India. It has partnered with India's government controlled National Investment and Infrastructure Fund to buy a majority stake in Continental Warehousing Corporation. In Peru, the company acquired Cosmos Agencia Maritima, a logistics service business for $315.7 million.

Unifeeder, founded in 1977, is an integrated logistics company with the largest and best-connected feeder and growing shortsea network in Northern Europe with connectivity to approximately 100 ports.