Maersk has reached an agreement with Bridgepoint Development Capital, a dedicated team that focuses on buyouts and capital investments, to acquire KGH Customs Services (KGH), a Swedish specialist in trade and customs management services in Europe.
The Danish shipping company will acquire KGH for a consideration of SEK2.6 billion (US$279 million) on a cash and debt free basis equivalent to a multiple of 16.3x 2019 EBITDA before synergies, excluding an earn-out component contingent on future Brexit performance. When ramped up, annual EBITDA synergies from the combination are expected to amount to approximately SEK50 million - 75 million (US$5.4-8 million).
Maersk said that KGH, which is based in Gothenburg, is a well-known and respected partner to a wide range of authorities, providing valuable consulting and advice, most recently in the connection with Brexit, as advisors to various authorities in the European Union and the United Kingdom.
KGH has in the past years achieved double-digit annual growth resulting in a revenue of approximately SEK890 million in 2019 (US$95.5 million), recurring EBITDA of approximately SEK160 million (US$17.2 million) and an EBITDA margin of approximately 18%. KGH has 775 employees and a yearly business of 1.98 million clearances.
This acquisition will further enhance Maersk’s capabilities as an integrated container logistics company, according to an announcement, offering end-to-end supply chain solutions to its customers.
Vincent Clerc, CEO of Ocean & Logistics at AP Møller-Maersk sees KGH as a perfect fit to Maersk offerings within logistics and services as well as another key building block in its strategic ambitions.
“With KGH, we will not only be able to strengthen our capabilities within customs services and related consultancy, but also reach more of our customers in Europe through a larger geographical footprint and digital solutions that will enhance our ability to meet our customers´ end-to-end supply chain needs. We achieve all this in one go instead of having to build our expertise through multiple acquisitions,” commented Clerc.
With the acquisition of KGH, Maersk will have a solid platform for growth in customs services in Europe with its own establishment operating in 22 European countries with a total of 2.38 million clearances annually, 960 specialised employees and a combined turnover of SEK1.02 billion (US$109.4 million).
The closing of the acquisition is subject to customary regulatory approvals. Until then, Maersk and KGH remain two separate companies and thus will do their business as usual.