DP World acquires US-based logistics firm for $1.2 billion

DUBAI: Dubai owned port operator DP World has announced the acquisition of 100 per cent stake in US-based logistics firm syncreon for an enterprise value of $1.2 billion.

This transaction is subject to the customary completion conditions and is expected to close in the second half of 2021.

The syncreon is a US-based global logistics provider that specialises in the design and operation of complex supply chain solutions for the high growth automotive and technology verticals.

It provides specialised value-added warehousing and distribution solutions through a variety of manufacturing, export packaging, transportation management, and reverse/repair and fulfilment services.

The company has a global presence across 91 sites in 19 countries and services a large and diversified portfolio of customers made up of multinational companies.

The group focuses on two key segments, large technology customers to enable e-commerce and Omni-channel fulfilment and aftermarket services and automotive companies for reception of materials, warehousing, and inventory management, kitting/sequencing for line feeding and export packaging.

This is complemented by a growing presence serving customers in the consumer goods, healthcare and industrial markets. In FY2020, the group reported a revenue of $1.1 billion with 57 per cent generated in EMEA (predominantly Europe) and 42 per cent in North America.

The group has longstanding partnerships with customers (with relationships averaging 18 years) and high contract renewal rates.

Sultan Ahmed Bin Sulayem, group chairman and CEO of DP World, said: “We are delighted to announce the acquisition of syncreon, which adds significant strategic value to the DP World given its strong logistics solutions capability and will allow the DP World to deliver end-to-end solutions to cargo owners.

The syncreon’s complex solutions capability brings strong long-term relationships with the cargo owners, which fits with the DP World’s vision to provide smart tech-led supply chain solutions to enable trade across key markets.

The company’s exposure to the sizeable, fast-growing technology and automotive markets offers significant growth opportunities over the medium- to long-term.

“We aim to build on this platform to deliver greater scale and provide compelling value-added supply chain solutions to cargo owners across a wider market.”

“The acquisition will be funded from the existing available resources. DP World continues to make positive progress on its capital recycling programmes and remains fully committed to its leverage target of below 4.0x net debt/EBITDA by the end of 2022,” the DP World CEO said.

Brian Enright, CEO of syncreon, said: “We are excited to join the DP World Group as we believe that syncreon will benefit from the group’s significant expertise in the wider supply chain and excellent relationships with cargo owners. We share the vision of serving our customers through removing inefficiencies and delivering value-added solutions.”

“While we have enjoyed great success over the years, we believe being part of the DP World will enable us to take the business to other markets,” he added.

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