DP World, owned by the Dubai government, is expanding its interests in Africa by making an open offer of $890 million to acquire all outstanding shares of South African Imperial Logistics.
The offer represents a premium of nearly 40 percent to the Imperial’s share price as of 7 July 2021, DP World said in a statement on Nasdaq Dubai, where its shares trade.
Despite adverse global and domestic economic conditions, the Imperial acquisition will be DP World’s most strategic acquisition in Africa to date, demonstrating the company’s long-term trust in the South African economy and the wider regional market, according to a statement.
The purchase is expected to finalize in Q4-2021 or Q1-2022, depending on Imperial’s shareholder and other regulatory clearances, according to the port operator. Imperial will provide DP World a “strong footprint in the high-growth Africa sector, introducing new capabilities” and relationships with cargo owners after the acquisition.
According to DP World, the acquisition will be paid with existing resources. By the end of 2022, the company intends to achieve its leverage objective of less than 4.0x net adjusted debt/EBITDA (earnings before interest, taxes, depreciation, and amortization). Last week, DP World completed the acquisition of Syncreon, a US-based logistics service, for $1.2 billion in cash and stock.
Mr. Sultan Ahmed bin Sulayem, Group Chairman and CEO of DP World, said, “We are delighted to announce the acquisition of Imperial, which will add significant strategic value to DP World given its attractive footprint and strong logistics capabilities.”
The imperial operations are known for their effective market access and integrated logistics. Market access offers cargo owners faster access to end-users through path-to-market solutions, while integrated logistics provides end-to-end supply chain solutions, including leading logistics, contract logistics, road transport, and air and sea flight.