Adnoc L&S has been on an expansion foray, part of its medium-term organic growth push. The latest deal slots perfectly into that gameplan. Image Credit: ADNOC L&S

Dubai: the ADX-listed ADNOC Logistics and Services Plc will acquire UK-based Navig8 TopCo Holdings Inc., which is a shipping pool operator with an owned fleet of 32 tankers and a presence in 15 cities across five continents.

The deal will 'accelerate' ADNOC L&S's global expansion as it 'progresses towards its medium-term strategic growth investment target'. It was last year the company went for the stock market listing.

Under the terms of the agreement, ADNOC L&S will acquire 80 per cent of Navig8 for Dh3.8 billion, with the economic ownership transfer effective from January 1, 2024. It intends to acquire the other 20 per cent in 2027 for a deferred consideration of between Dh1.2 billion to Dh1.7 billion.

“This value accretive acquisition marks another major milestone as we deliver on our transformational growth strategy," said Capt. Abdulkareem Al Masabi, CEO of ADNOC L&S. "The addition of Navig8’s presence in 15 international cities, fleet of tankers and world-class services will expand our geographical footprint and service offering, cementing our position as a leading global energy maritime logistics and services company.”

New deal part of revised growth plan
At the time of its ADX listing, ADNOC L&S committed to investing between Dh14.7 billion to Dh18.3 billion in the medium term. After a 'strong' Q1-2024 performance and earnings outlook guidance upgrade, the company revised its guidance upwards with the intention to invest in excess of Dh18.4 billion ($5 billion) in energy-related maritime logistics over the medium term.

With the acquisition, the current Navig8 management team will continue to operate the business, while 'maintaining its current operations under the existing Navig8 brand, to ensure continued strength in business performance'. The aim is to leverage the 'complementary benefits' from its ADNOC L&S partnership.

How the deal will stack up for ADNOC L&S

The first full year of investment is projected to boost ADNOC L&S earnings per share by at least 20 per cent. Navig8 delivered over $400 million (Dh1.5 billion) EBITDA in 2023, equivalent to 44 per cent of ADNOC L&S’ EBITDA in the same period.

"ADNOC L&S will unlock significant value through cost saving synergies, with savings targets of over $100 million (Dh367 million) per annum 'already identified through optimizing technical management costs and bunker spend'.

Navig8’s owned fleet of 32 tankers, will also 'greatly enhance ADNOC L&S’ international profile and expand its blue-chip customer base'.

A 100%+ upturn

ADNOC L&S had a record-setting IPO, which was 163 times oversubscribed and making it the most in-demand IPO worldwide at the time of listing - and the second largest IPO in MENA region 2023. Since listing, ADNOC L&S’ share price has appreciated more than 100 per cent.