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Imperial Logistics has taken another step in its bid to “get fitter”, by rationalising its sprawling businesses, with the sale of its South American shipping arm.
Brazilian inland waterways company Hidrovias do Brasil has bought the 90-vessel operation, which reportedly saw revenues of $36m for the year ending 30 June and ebitda of $9.4m.
The deal was for $90m, with, interestingly, an earn-out of up to $5m based on water levels over four years.
Imperial is making some significant structural changes. Last year it sold its European shipping business for €225m, as well as Multinaut, an inland waterways service on the Rhine-Main-Danube.
As The Loadstar Premium column noted in August: “Shrinking to get fitter is a clear sign, strategically, that Imperial is growing up, swiftly learning that being such a diverse conglomerate may not make sense, not only if it aims to back its strategic ambitions, but also its operational units and client base.
“Deeper exposure to air and ocean would be welcome add-ons,” it added.
Imperial has long harboured ambitions in the freight forwarding segment, and appears now to be focusing all its efforts on Africa.
It has made an investment this year: in February, it bought 60% of e-commerce logistics business ParcelNinja, which offers an outsourced warehousing and fulfilment business to South African online shops.
But more sales look set to be in the pipeline before more acquisitions.
Imperial noted: “It is Imperial’s strategic intent to become a ‘One Imperial’ business and serve as the ‘Gateway to Africa’ to our clients, principals and customers.
“We are transforming from a portfolio of regional businesses to an integrated end-to-end logistics and market access business that is focused on Africa, leveraging our scale, competitive advantages and capabilities in the healthcare, consumer, chemicals, automotive, and industrial and commodities industries.
“As such, we thoroughly assessed the strategic fit of our Logistics International business and decided to exit this business in a phased approach as it is non-core. The South American shipping business forms part of this process and follows the disposal of the European shipping business.
“The remaining freight management and contract logistics operations within the international logistics business remain for sale and we are in the process of disposing of these.”
The restructuring plan has changed over the past two years: in an interview with The Loadstar in June 2019, international chief executive Hakan Bicil said Imperial was interested in emerging markets such as South America. However, with its focus now clearly on Africa, an acquisition deal could be on its way.
Imperial said: “The transaction’s proceeds will be used to optimise the financial position of Imperial, reducing its overall existing debt in the short-term and will be invested in new growth areas in line with the group’s strategy in due course.”
But one source told Premium last year: “Imperial is a funny conglomerate, as it wants to become global but does not seem to know how do it.”
Another source said: “Lots of promises, but whether it is ready or not, it never seems to be the right time for it [to pull the M&A trigger] and decide what kind of second-tier player it wants to be.”
One prediction has come true though. Mr Bicil told The Loadstar in June 2019: “We will be a very different company in two years.”