DP World has announced the acquisition of the US-based global logistics provider, syncreon, for an enterprise value of US$1.2 billion.
syncreon focuses on the design and operation of complex supply chains for the high growth automotive and technology industries, while it provides specialised value-added warehousing and distribution solutions through a variety of manufacturing, export packaging, transportation management, 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. Firstly, large technology customers to enable eCommerce and omni-channel fulfillment and aftermarket services, and secondly automotive companies for reception of materials, warehousing, inventory management, kitting/sequencing for line feeding, and export packaging.
In the fiscal year 2020, the group reported revenue of US$1.1 billion with 57% generated in EMEA region (predominantly Europe) and 42% in North America.
Sultan Ahmed Bin Sulayem, Chairman and CEO of DP World believes that the acquisition will add significant strategic value to DP World and will allow the UAE-based global operator to deliver end-to-end solutions to cargo owners.
syncreon’s exposure to the sizeable, fast-growing technology and automotive industries offers significant growth opportunities over the medium to long term, according to a statement.
"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," added Sultan Ahmed Bin Sulayem.
The acquisition will be funded from existing available resources, said DP World, which 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.
"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," commented Brian Enright, CEO of syncreon.
The transaction is still subject to customary completion conditions and is expected to close in the second half of the year.