The global port terminal operator’s $765.4 million acquisition is part of a larger industry shift toward vertical integration.
Dubai-based global port terminal operator DP World has acquired 100 percent of Unifeeder Group, a feeder and shortsea container carrier headquartered in Aarhus, Denmark, from current owner Nordic Capital, the companies confirmed in separate statements.
The 660 million euro (U.S. $765.4 million) purchase will “further enhance DP World’s presence in the global supply chain and broaden our product offering to our customers — the shipping lines and cargo owners — with a view to ultimately reduce inefficiencies and improve the competitiveness of global trade,” DP World said.
More specifically, the integration of Unifeeder gives DP World an entirely new line of business within the global supply chain.
Founded in 1977, Unifeeder is the largest feeder vessel operator in Europe, carrying roughly 3.2 million TEUs annually to and from European cargo hubs and regional ports on its fleet of 60 short-term chartered vessels. According to maritime research firm Alphaliner, Unifeeder ranks as the 30th-largest container carrier in the world by operating fleet capacity.
Unifeeder also offers multimodal shortsea services that combine maritime transport with overland solutions for door-to-door cargo delivery.
With about 400 employees spread across 25 countries, Unifeeder reported annual revenues of 510 million euros in 2017, with earnings before interest and tax (EBIT) margins that are “in line with other asset-light logistics operators,” according to DP World.
Although still subject to the relevant regulatory approvals, DP World expects the acquisition to close in the fourth quarter and to be earnings accretive within the first full year after completion.
According to Unifeeder, the takeover will allow it to benefit from DP World’s much greater size and scope while continuing to operate on a fully independent basis under existing management.
Sultan Ahmed Bin Sulayem, group chairman and CEO of DP World, said the acquisition “supports our strategy to grow in complementary sectors, strengthen our product offering and play a wider role in the global supply chain as a trade enabler.”
“The ever-growing deployment of ultra-large container vessels has made high-quality connectivity from hub terminals crucial for our customers, and Unifeeder is a best-in-class logistics provider in this space with a strong reputation in Europe,” he said. “Our aim is to leverage on the in-house expertise of Unifeeder and to accelerate growth in this scalable platform to deliver value for all stakeholders.”
Unifeeder CEO Jesper Kristensen said the combination made sense thanks to similarities between the two firms’ business models, as well as their vision and values.
“By having an owner as dedicated to customer-centric, multiuser solutions as the ones Unifeeder provides, we will continue to build ‘best-in-class’ services, coverage and connectivities,” said Kristensen. “Our increased outreach and international scope will facilitate that we can serve our clients even more broadly and with even more scale and competitiveness. Hence, together with our new owner, we will strive to further improve our offering and further optimize the transshipment markets and the supply chains in Europe and beyond — to the benefit of our clients in particular and the cargo in general.”
From a broader perspective, the tie-up is part of a larger industry shift toward vertical integration of supply chain services.
Maersk Line, the world’s largest ocean carrier, has been on the forefront of this movement, announcing plans early this year to provide end-to-end transportation services that will make it possible to arrange transportation by just dealing with Maersk, including inland transport, customs brokerage, financing, insurance and consolidation, among other services.
In this way, Maersk aims to emulate UPS, FedEx, DHL and other express package companies that offer shippers the opportunity to deal with a single company.
Although several of the top ocean carriers also own terminal operators — Maersk, for example, has its APM Terminals subsidiary — few terminal operators own container lines outside of China, where it is more common to have a terminal operator running its own much smaller feeder line, making DP World’s purchase of Unifeeder that much more interesting.
“In an environment where main carriers are attempting to integrate deeper into the supply chain on the land side of the business, one of the largest terminal operators is making a move into the supply chain as well, once more showing that the entire industry is in the midst of a fundamental transformation,” Lars Jensen, CEO of SeaIntelligence Consulting, said of the deal.
DP World picks up European feeder carrier
