AP MÃ¸ller – MÃ¦rsk A / S expands contract logistics capabilities with the acquisition of LF Logistics Holdings Limited, one of the leading omnichannel fulfillment contract logistics companies in Asia Pacific.
Today, AP MÃ¸ller – MÃ¦rsk A / S (Maersk) announces that it has entered into an agreement to acquire 100% of the shares of LF Logistics Holdings Limited (LF Logistics) in an all-cash deal. LF Logistics is a well-established omnichannel fulfillment contract logistics company with a strong position in Asia-Pacific. The acquisition will further strengthen Maersk’s capabilities as an integrated container logistics company, providing its customers with comprehensive end-to-end supply chain solutions.
LF Logistics is a Hong Kong-based private company owned by Li & Fung (78.3%) and Temasek Holdings (21.7%) that focuses on providing contract logistics solutions to clients in the organized Asia-Pacific region. through two key business units: In-Country Logistics (ICL) and Global Freight Management (GFM).
In addition to the LF Logistics acquisition agreement, Maersk will enter into a strategic partnership with Li & Fung to develop logistics solutions. In addition, Li & Fung’s parent company is expected to retain and continue to develop the separate GFM business once the transaction is finalized.
The enterprise value of the transaction is $ 3.6 billion, including post-IFRS 16 lease liabilities, reflecting a pre-synergy EV / EBITDA multiple of 14.4x based on Estimated EBITDA for the year 2021 for the ICL activity. In addition, a earn-out with a total value of up to US $ 160 million linked to future financial performance has been agreed as part of the transaction.
Since the creation of LF Logistics in 1999, the company has considerably extended its geographical presence and today operates within the ICL activity an extensive network of 223 warehouses with a capacity of 2.7 million square meters and approximately 10 000 employees in 14 Asia-Pacific countries. The ICL business is a key supply chain partner for many multinational client brands in verticals such as fashion and lifestyle, retail and fast-moving consumer goods markets. Asia-Pacific.
For the full year 2020, LF Logistics achieved revenues of approximately US $ 1.3 billion and post-IFRS 16 adjusted EBITDA of approximately US $ 235 million, the ICL business generating revenue of approximately US $ 850 million and post-IFRS 16 adjusted EBITDA of approximately US $ 230 million. For the full year 2021, the ICL business is expected to show revenue of approximately $ 1 billion with a post-IFRS 16 adjusted EBITDA of approximately $ 250 million.
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The acquisition will strengthen Maersk’s logistics and service offerings to its customers within ‘Fulfilled by Maersk’, as it will create a strong value proposition for customers targeting the fast growing Asian consumer segment, adding the footprint of LF Logistics and industry-leading capabilities in omni-channel execution. solutions, e-commerce and ground transportation in Asia-Pacific markets. In addition, LF Logistics also brings a unique technological platform.
The combination of Maersk and LF Logistics activities will unlock substantial business synergies arising from the cross-selling of LF Logistics order fulfillment products to Maersk customers and the cross-selling of Maersk logistics services within “Managed by” and âShipped by Maerskâ to LF Logistics customers. In addition, minor cost synergies are expected from the merger of the two activities. Based on organic growth and synergies, the ICL business is expected to more than double its revenue and EBITDA by the end of 2026. Transaction costs and one-off costs associated with the transaction are estimated at around $ 80 million and will be completed in 2022/23.
The acquisition is subject to regulatory approvals and the transaction is expected to close in 2022. Until closing, Maersk and LF Logistics will remain two separate companies.
Maersk invites investors and analysts to participate in a conference call today at 9:00 a.m. CET where SÃ¸ren Skou (Group CEO), Patrick Jany (Group CFO) and Vincent Clerc (CEO of Ocean & Logistics ) will present the transaction and the strategic rationale. A presentation will be available on the Maersk investor site (investors.maersk.com) prior to the conference call.
Copenhagen, December 22, 2021
Head of Investor Relations, Stig Frederiksen, tel. +45 3363 3106
Head of External Relations, Signe Wagner, tel. +45 3363 1901
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