|By Arabian Post Staff| DP World Limited announced it has entered into agreements to acquire Maritime World LLC, owners of Dubai Maritime City, and Drydocks World LLC for a total cash consideration of $405 million.
Of this, the Dubai Maritime City owners are to be acquired for $180 million while the Drydocks World for a cash consideration of $ 225 million.
DMC is a world class maritime service facility and industrial business zone in a prime location of central Dubai and adjacent to DP World’s Port Rashid. It is a maritime focused commercial and industrial park, which extends to 2.3 million sqm on a man-made peninsula and provides Economic Zones World FZE additional land as an alternative to the highly-occupied Jebel Ali Free Zone.
Drydocks World is a market leader in the ship repair business with the largest ship repair yard in the Middle East. The business delivers stable ship and rig repair revenues and has specialist capabilities in niche ship newbuilds and conversions. Drydocks’ acquisition will integrate well into P&O Maritime (POM), which is DP World’s 100% owned maritime services subsidiary. On a proforma basis, the US$ 225 million capital injection into Drydocks World represents a 2016A EBITDA multiple of 8.0x.
The acquisitions are expected to be earnings accretive from the first full year of consolidation. On a proforma basis, DP World’s net leverage as of 1H2017 would be 2.9x Net Debt to EBITDA with these acquisitions compared to the reported 2.6x.
Both acquisitions are subject to certain conditions precedent and the acquisition of Drydocks World is subject to the successful completion of its debt restructuring process. Both transactions are expected to close before the end of the first quarter of 2018. As the acquisitions are considered related party transactions under the DFSA Market Rules, DP World will comply with the relevant requirements of DFSA Market Rule 3.5.3.
Sultan Ahmed Bin Sulayem, DP World Group Chairman and CEO, said the acquistions would further strengthen the Group’s maritime services and port related businesses. “As a global trade enabler, we have been targeting a broader strategy to grow complementary sectors in the global supply chain such as industrial parks, free zones and logistics adding further value for all our stakeholders,” he said.
He said that the Dubai Maritime City would provide the group with stable leasing income from DMC’s existing industrial zone and spare capacity to develop industrial and commercial activities for the maritime sector in a prime location of Dubai. The company aims to develop the best-in class Maritime City serving the needs of the maritime industry and leveraging on our expertise and experience from ther ownership of the Jebel Ali Free Zone and is consequently well positioned to deliver significant value in the medium term.
“Drydocks World bolsters our investment in the maritime sector through our subsidiary P&O Maritime. We are acquiring a market leader in the Middle East with the potential to deliver near term synergies and new revenue opportunities over the longer term, particularly in ship conversion and in areas where POM has existing expertise. We remain excited about the growth prospects of this business,” he said.
Sultan pointed out that the transactions will enhance the group’s position as a leading maritime services provider and help leverage its proven track record to accelerate growth and deliver stakeholder value.