Aramex completes acquisition of e-commerce platform MyUS in $265m deal

Florida-based firm to be fully integrated as strategic business unit within Aramex courier business segment

Dubai-listed Aramex has completed a deal to fully acquire Florida-based e-commerce platform MyUS. Silvia Razgova / The National
Beta V.1.0 - Powered by automated translation

Aramex, the Middle East's biggest courier company, has completed the acquisition of Florida-based e-commerce platform MyUS for an all-cash price of about $265 million after securing the necessary regulatory approval.

The deal marks Aramex’s largest acquisition to date as it seeks to become more competitive in the cross-border e-commerce sector, the Dubai-listed company said in a statement on Wednesday. A binding agreement to fully acquire the platform was initially announced in June.

"Our shareholders will immediately see the impact on financial performance and over the long term we can unlock further value through operational and cost synergies," said Othman Aljeda, chief executive of Aramex.

"Our customers are set to benefit from further enhanced network coverage and service excellence from first to last mile. Our employees will benefit from knowledge sharing, further developing their expertise in the cross-border express business, including learning and adopting MyUS’s leading proprietary software."

Aramex in August reported a 32 per cent annual decline in second-quarter net income to Dh44.6 million ($12.1m) as revenue fell due to lower courier volumes.

The global logistics industry is reporting a slowdown in e-commerce activity as consumers return to brick-and-mortar shops with the easing of Covid-19 restrictions, while higher inflation rates are also squeezing discretionary spending, Mr Aljeda said at the time.

MyUS will be fully integrated into Aramex’s courier business segment, the statement said.

It will retain its brand name and will complement Shop & Ship, Aramex’s subscription-based last mile e-commerce services platform.

"We are ready to take our products and solutions to new markets by leveraging on Aramex’s extensive global network, scale, knowledge and expertise in markets exhibiting very attractive characteristics such as the Mena region, the UK and Australia," said Ramesh Bulusu, chief executive of MyUS.

"Together with Aramex, we will work on developing a joint business plan to unlock revenue and operational synergies to help grow the cross-border e-commerce business ... ultimately, our goal under Aramex’s ownership is to accelerate our growth in a fragmented multi-trillion-dollar global e-commerce market.”

The acquisition is expected to further strengthen Aramex’s cross-border express business by increasing shipment volumes, growing its customer base and expanding coverage in new origins and destinations, Aramex said.

The deal is also expected to be "immediately value accretive" for Aramex, providing robust growth in revenue, attractive profitability and "superior" cash conversion, it added.

In 2021, MyUS recorded more than $100m in revenue and delivered 1.1 million packages to customers who shop from retailers based in the US, UK and China. The company has about 180,000 active customers.

EFG Hermes, Egypt's biggest investment bank, said in a research note that the transaction would accrete value to shareholders even on very conservative assumptions.

The lender's back-of-the-envelope analysis suggests that the transaction is yielding an unlevered internal rate of return of more than 12 per cent and would potentially add $75m to $80m in equity value or Dh0.2 per share.

"From a funding perspective, Aramex continues to have a very healthy balance sheet: its net-debt/Ebitda [earnings before interest, taxes, depreciation, and amortisation] would still be below 1x even after the transaction," it said.

Updated: October 19, 2022, 8:35 AM