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Author Topic: DFDS to buy UN Ro-Ro in USD1.15 billion deal  (Read 843 times)
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Hannes van Rijn
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« on: April 12, 2018, 01:01:37 pm »

DFDS, the listed Danish ro-ro shipping and logistics group, has agreed to acquire 98.8% of the shares in Turkish freight ferry company UN Ro-Ro for EUR950 million (USD1.15 billion) from Turkish private equity firms Actera Group and Esas Holding.

The Copenhagen-based company has long sought an acquisition target in the ro-ro space and the Turkish company, with a fleet of 12 ships that operate on services connecting Turkey with Italy and France, meet this objective.

The acquisition will extend the route network of DFDS to the eastern Mediterranean. It already has services that link France with north Africa in the Mediterranean.

UN Ro-Ro operates five routes in the Mediterranean: four connect Turkey and Italy and Turkey and France. The company carried 202,000 freight units in 2017, corresponding to a 34% share of the total market, including land transport.

In addition, UN Ro-Ro operates two port terminals and provides intermodal solutions. For 2018, revenue of EUR240 million and EBITDA of EUR97 million are expected. The company has 500 employees.

There will be operational synergies as well, since UN Ro-Ros ships were built at the Flensburger yard in Germany and are quite similar to the Flower-class ships of DFDS.

In addition, UN Ro-Ros business model of carrying unaccompanied freight units, mainly trailers, on ro-ro ships between Turkey and the European Union is identical to DFDSs North Sea business model. This will enable DFDS to leverage its strong track record in this market, the company said.

DFDS said the financing would be structured to retain flexibility and includes an expected equity issue of approximately 5% of the issued share capital. Dividends and an ongoing share repurchase programme will be suspended as part of the financing arrangement.

The company has raised its guidance for this year and said EBITDA should now reach DKK3.03.2 billion, having previous forecast it at DKK2.652.85 billion.

With the acquisition of UN Ro-Ro, we are expanding into one of Europes most attractive freight markets, which is operationally similar to that of northern Europe. This gives us opportunity, together with the existing strong management team, to leverage our network, fleet, experience, and skills to develop the business further, while supporting the growth of UN Ro-Ros customers, Niels Smedegaard, chief executive officer (CEO) of DFDS, said.

We are excited to become part of DFDSs network and the development opportunities this brings to both our customers and employees. I am confident that the industry know-how, combined network capabilities and the financial strength of our new shareholder, will allow UN Ro-Ro to enhance the competitiveness of Turkish exporters and international logistics companies, said Seluk Boztepe, CEO of UN Ro-Ro.   

The transaction is subject to approval by the Turkish, Austrian, and German competition authorities, as well as the Italian authorities in relation to the transfer of the Trieste terminal as a strategic asset. Closing of the transaction is expected to take place in June.

In view of the planned fleet renewal at both DFDS and UN Ro-Ro and potential investment opportunities during the next 1218 months, the DFDS board is recommending a share issue of approximately 5% of the current share capital, or DKK1 billion, as part of the financing structure that otherwise consists of committed term loan financing.

An extraordinary general meeting at DFDS will be held prior to the closure of the transaction and the Lauritzen Foundation, which holds 42% of DFDS share capital, has confirmed its intention to participate pro rata in a share issue.

The UN Ro-Ro purchase can be seen as a step in the consolidation of the still largely fragmented European shortsea ro-ro shipping industry. The DFDS network will, after this deal, range from the Baltic to the North Sea, the Bay of Biscay, and both the western and eastern Mediterranean.

The only other ro-ro shipping company with a comparable network is Naples-based Grimaldi group, which, in addition to shortsea vessels, operates deepsea freight ro-ros and pure car and truck carriers and has a hub in Antwerp to link up many of these services.

Smedegaard told Fairplay that the company had expected the sulphur emission rules covering large parts of European waters from the start of 2015 to push some companies into financial difficulties, making them potential acquisition targets. However, a sharp fall in the price of oil in late 2014 cushioned the effects of the cost of compliance with the rules and the expected investment opportunities for DFDS failed to materialise.

Source IHS
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« Reply #1 on: April 19, 2018, 10:46:35 am »

What information did you study from which source helped me?
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