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DP World today announced it has agreed to acquire US-headquartered contract logistics operator syncreon for $1.2bn.
The deal, which is subject to customary completion conditions and is expected to close before the year-end, will see the Dubai-headquartered terminal operator continue its expansion into 3PL and 4PL services.
Sultan Ahmed Bin Sulayem, DP World group chairman and CEO, said: “We are delighted to announce the acquisition of syncreon, which adds significant strategic value to DP World given its strong logistics solutions capability, and will allow DP World to deliver end-to-end solutions to cargo owners.”
Last year, syncreon reported revenue of $1.1bn, of which 57% was generated in EMEA (predominantly Europe) and 42% in North America.
According to a recent Blomberg report, syncreon underwent a financial restructuring in 2019, which saw Carlyle group and CVC Capital Partners assume control of the firm from previous backers Centerbridge Partners and GenNx360.
Bloomberg further reported in April its owners began preparing it for a sale, aiming for a $1.5bn price tag.
Then company specialises in two key verticals – eCommerce and omni-channel fulfilment and aftermarket services; and the automotive industry covering the reception of materials, warehousing, inventory management, kitting/sequencing for line feeding, and export packaging.
These have recently been complemented by a growing presence in consumer goods, healthcare and industrial markets.
“syncreon’s complex solutions capability brings strong long-term relationships with cargo owners, which fits with DP Worlds vision to provide smart tech-led supply chain solutions to enable trade across key markets,” Mr Bin Sulayem said.
“syncreon’s exposure to the sizeable, fast-growing technology and automotive industries 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 add supply chain solutions to cargo owners across a wider market,” he added.
The acquisition will be funded from existing available resources, DP World revealed, as part of its plan “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”.
Brian Enright, CEO of syncreon, added: “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 add solutions. While we have enjoyed great success over the years, we believe being part of DP World will enable us to take the business to other markets.”
It has 91 sites across 19 countries, providing “specialised value-added warehousing and distribution solutions through a variety of manufacturing, export packaging, transportation management, reverse/repair and fulfilment services”.