DP World buys back British ferry and shipping freight operator for $421m
DP World recently announced that it had bought back British ferry and shipping freight operator P&O Ferries for $421 million more than a decade after it sold the British firm.
P&O Ferries, which operates a fleet of 21 vessels on the Short Sea, North Sea and Irish Sea sectors across 11 ports, was first acquired by the Dubai-based company in 2006 but was sold off soon to Dubai World, the state holding company.
DP World said the P&O Ferries deal was expected to be earnings accretive from the first full year of consolidation and meet its return targets.
The transaction is expected to close in the first half of the year, DP World said in a statement.
DP World said its acquisition of P&O Ferries, which includes P&O Ferrymasters, is part of its efforts to expand beyond its core ports business. P&O Ferrymasters provides supply chain solutions in 19 European locations. P&O Ferries handles over 2.5 million freight units per year, which accounts for approximately 75 per cent of group revenues.
Sultan Ahmed bin Sulayem, Group Chairman and CEO of DP World, said P&O Ferries is a strong, recognizable brand and adds a best-in-class integrated logistics provider into our global portfolio.
“Importantly, P&O Ferries provides efficient European freight connectivity building on last year’s acquisition of Unifeeder. This transaction is in line with our strategy to grow in complementary sectors, strengthen our product offering and play a wider role in the global supply chain as a trade enabler.”
He said P&O Ferries has delivered a robust performance in recent years.
“We aim to drive further value through increasing efficiencies and offering value-added solutions to our customers. Overall the transaction offers compelling value strategically and financially, and we look forward to P&O Ferries contributing to driving shareholder value in the coming years.”
P&O Ferries reported revenues of $1.4 billion and EBITDA of $131 million. The acquisition is expected to be earnings accretive from the first full year of consolidation and is expected to meet DP World’s return targets.