News / DFDS to buy Ekol Logistics in acquisition u-turn

Photo: Ekol Logistics

In a surprising commercial u-turn, Danish ferry and road freight operator DFDS has confirmed that it is pressing ahead with the acquisition of Turkish group’ Ekol Logistics’ international route network.

The two parties had agreed the transaction in April, but DFDS pulled out of the sale at the beginning of this month after citing “certain contractual conditions” that had remained unfulfilled.

However, today DFDS chief executive Torben Carlsen said the parties had returned to the negotiating table and “put together a deal what we can all live with”.

It is understood that the sticking point had been who would pick up debt that had accrued during the sale process, with Ekol’s owners having now agreed to settle the outstanding amount.

As a result, DFDS has acquired the company for a debt-free price of €240m, equal to a EV/sales multiple of 0.55x based on Ekol’s revenue for Q3 2024 last 12 months.

“The company has since April 2024, due to the decline in earnings and asset investments, incurred additional debt that has been excluded from the revised agreement. The transaction’s equity value of €205m is unchanged compared to April 2024,” a DFDS statement said.

The acquisition will see some 3,700 employees added to DFDS’s headcount, along with 1,300 trucks, 4,000 trailers, 600 containers and around 120,000sq metres of warehousing and cross-docking space.

In addition, it has signed a new option to extend the duration of the terminal agreement with Yalova Port, which is also owned by Ekol’s main shareholders.

Mr Carlsen reiterated the strategic motives for the takeover, including the consolidation of Ekol’s Turkey-Europe road and rail freight cargo flows onto DFDS vessels, as well as “access to global manufacturers operating in Turkey’s high growth market and solidifying our nearshoring strategy”.

Ekol reported a revenue of €468m in 2023 and an EBIT of €11.5m, which suggested a margin of around 2.5%.

However, Mr Carlsen said it was on course to post a loss this year and added DFDS had put together “a solid turnaround plan”.

“We intend to break even by the end of 2025 and to return the company to a 5% EBIT margin by the end of 2027,” he said.