DP World, one of the world's largest port operators, acquired US logistics firm Syncreon for a total enterprise value of $1.2 billion, the company said on Thursday.
Syncreon is a US based global logistics provider that specialises in the design and operation of complex supply chains for the high-growth automotive and technology industries.
The acquisition “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,” Sultan Ahmed Bin Sulayem, group chairman and chief executive of DP World, said.
“Syncreon’s complex solutions capability brings strong long-term relationships with cargo owners, which fits with DP World’s vision to provide smart tech-led supply chain solutions to enable trade across key markets.”
Syncreon operates globally across 91 sites in 19 countries and services a large and diversified portfolio of customers made up of multinational companies.
In the financial year 2020, the group reported revenue of $1.1bn with 57 per cent generated in EMEA (predominantly Europe) and 42 per cent in North America.
The acquisition will be funded from existing available resources, according to DP World. The transaction, which is subject to customary completion conditions is expected to close in the second half of 2021.
The company has been expanding its global footprint to boost growth.
DP World recorded a 10.2 per cent increase in first-quarter container shipping volumes and anticipated delivering an improved performance in 2021, as the global economy recovers from the Covid-19 pandemic.
The global ports operator handled 18.9 million twenty-foot equivalent units (TEUs) in the first three months of 2021, up from 17.2m TEUs in the same quarter last year. All its regions recorded growth, led by the Americas and Australia, where volumes rose 17.7 per cent to 2.7m containers.
Global trade is set to improve after a rebound in the second half of last year due to pent-up demand for consumer durables from advanced economies such as cars and the resumption of supply chains in emerging markets, according to the International Monetary Fund. Trade is forecast to expand 8.4 per cent this year and 6.5 per cent next year after shrinking 8.5 per cent in 2020, according to the fund's estimates.
Last month, DP World opened a new container terminal at Berbera port in Somaliland to increase the container terminal's capacity to 500,000 Twenty Foot Equivalent Units (TEUs) annually from 150,000 currently.
The company is also developing Senegal's Ndayane deep-water port, with a $1.1bn investment over two phases of the project. The project is its biggest port investment in Africa and is expected to boost Dakar's position as a major logistics hub and gateway to west and north-west Africa.