AD Ports Group announced today that it had signed a deal to obtain an 80% equity stake in Dubai-based Global Feeder Shipping (GFS), a global container shipping company. The total purchase consideration for the 80% stake amounts to AED 2.9 billion (US$ 800 million), implying a 100% Enterprise Value of AED 3.7 billion (US$ 1.0 billion), with the acquisition fully funded through a new acquisition loan.
This earnings and value-accretive strategic investment substantially expands AD Ports Group’s global feeder shipping footprint and adds to its long-term strategy to become one of the world’s premier short-sea and feeder shipping players.
HE Falah Mohammed Al Ahbabi, Chairman of AD Ports Group, says, “At the direction of our nation’s wise leadership, AD Ports Group has been on a journey of development throughout 2022, driven by both organic growth and prudent investments. Our acquisition of a majority stake in GFS, the largest external investment in our company’s history, will deliver a step-change in the range of services we can offer and significantly enhance our global connectivity. Our ambition is to become one of the world’s leading shipping companies, offering the most comprehensive range of maritime services, and this investment moves us significantly closer to achieving that goal.”
GFS’ LTM financial performance was strong, with revenue of US$ 1,085 million, EBITDA of US$ 521 million (EBITDA Margin of 48%) and Net Profit of US$ 481 million.
The company has built one of the largest fleets of container ships globally, featuring 26 owned and operated vessels with a total capacity of 72,500 TEUs, covering the Middle East, Indian Subcontinent and Southeast Asia – with services connecting the UAE to India, Pakistan, Sri Lanka, Egypt, Sudan, Djibouti, Yemen, Kingdom of Saudi Arabia, Bahrain, China, South Korea, and Vietnam, among others.
AD Ports Group will look to integrate GFS into its Maritime Cluster, which already offers a comprehensive portfolio of shipping, offshore and subsea services. Aligning GFS services with AD Ports Group companies SAFEEN Feeders and Transmar will make AD Ports Group the world’s largest independent feeder company by vessels owned, with an owned fleet of 35 boats, and the third largest globally by volumes carried with a total container capacity of 100,000 TEUs.
Captain Mohamed Juma Al Shamisi, Managing Director and Group CEO of AD Ports Group, adds, “GFS offers more than 30 years of experience and excellence in providing container feeder services in the Middle East, Asia, and Africa, in addition to a diverse and fit-for-purpose fleet. Our Maritime Cluster has delivered remarkable returns in 2022, reflecting the significant market appetite for shipping, offshore and subsea services. Integrating GFS into our operations will enable us to increase our customer base, broaden our global footprint and build upon this significant momentum. As always, we thank the UAE’s wise leadership, whose support has enabled us to achieve today’s historic announcement.”
The acquisition will boost AD Ports Group’s trade activities and connectivity to core markets and enhance its feedering business, providing significant economies of scale through an expanded route network and fleet. In addition, the acquisition will further strengthen the company’s hub and spoke model by linking core markets in the Gulf, Indian Subcontinent, Red Sea, and Turkey to its critical port assets, including Khalifa Port.
GFS’ integration with SAFEEN Feeders’ services can generate significant operational synergies. Subject to regulatory approvals, the transaction is expected to close in Q1 2023. GFS’s existing management will remain in place, with the founders retaining a 20% stake in the company.
Amir Maghami, Chairman of GFS, says, “This is a key moment for GFS, which sees our company become part of AD Ports Group to create the largest single provider of shipping services in the region. I am truly proud of what our team has achieved and excited for the future, which will see us continue expanding our global footprint. Our priority has always been to improve our systems and processes to serve global trade continuously, and under the ownership of AD Ports Group, we will be able to deliver a new level of service and support for international customers.”