Dubai: Dubai owned port operator DP World has bought US-based logistics firm syncreon for an enterprise value of $1.2 billion. This transaction is expected to close in the second-half of this year. The firm, syncreon, specializes in the design and operation of complex supply chains for the high-growth automotive and technology industries.
It has a presence across 91 sites in 19 countries and for the last financial year reported revenue of $1.1 billion with 57 per cent generated in EMEA (predominantly Europe) and 42 per cent in North America. The company has longstanding partnerships with customers averaging 18 years, and high contracts renewal rates.
Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World, said the deal "adds significant strategic value to DP World given its strong logistics solutions capability, and will allow DP World to deliver end-to-end solutions to cargo owners."
The acquisition will be funded from existing resources. DP World continues to make "positive progress on its capital recycling programmes and remains fully committed to its leverage target of below 4.0x net debt/EBITDA by the end of 2022," the ports and terminals operator said in a statement.
A good fit
"syncreon's complex solutions capability brings strong long-term relationships with cargo owners, which fits with DP Worlds vision to provide smart tech-led supply chain solutions to enable trade across key markets," said Bin Sulayem. "syncreon's exposure to the sizeable, fast-growing technology and automotive industries offers significant growth opportunities over the medium to long term. We aim to build on this platform to deliver greater scale and provide compelling value add supply chain solutions to cargo owners across a wider market."
* The US group focuses on two key segments - large technology customers to enable ecommerce and omni-channel fulfilment and aftermarket services. And automotive companies for receiving materials, warehousing needs, inventory management, kitting/sequencing for line feeding, and export packaging.
* There is also a growing presence for the company in consumer goods, healthcare and industrial markets.
* In FY2020, the group reported 57% of revenues from EMEA (predominantly Europe) and 42% in North America.