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Dubai-based port operator DP World has fully acquired the US-based logistics provider Syncreon for an enterprise value of $1.2 billion which will be self-funded.
This transaction is subject to customary completion conditions and is expected to close in the second half of this year, DP World said in a statement Thursday.
Syncreon is a global logistics provider that specializes in the design and operation of complex supply chains for the high growth automotive and technology industries, it added.
In FY2020, the group reported revenue of $1.1 billion with 57 percent generated in EMEA (predominantly Europe) and 42 percent in North America.
On the financing of the purchase, DP World said it is making progress on its capital recycling programmes and “remains fully committed” to its leverage target of below 4.0x net adjusted debt/EBITDA (earnings before interest, tax, depreciation and amortisation) ratio by the end of 2022.
Moody’s Investor Service in a May 2021 report said that DP World’s net leverage stood at 7.8 times. The ratings agency said it has a low refinancing risk over the next three years. Its “liquidity is strong, underpinned by limited debt maturities until 2023 and sizeable cash balances of $2.1 billion as of 31 December 2020 combined with an undrawn revolving credit facility of $1.8 billion with good covenant headroom.”
Reuters reported Wednesday that the port operator has hired banks to help sell a minority stake in its flagship business park, Jebel Ali Free Zone, which could fetch a few billion dollars.
DP World, which reported a 11 percent rise in revenue to $8.5 billion for 2020, plans $1.2 billion in capital expenditure this year.
(Writing by Brinda Darasha; editing by Seban Scaria)
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© ZAWYA 2021
