DP World announced Thursday the acquisition of supply chain solutions provider syncreon at an enterprise value of $1.2 billion. The Dubai state-owned port operator said the deal will allow it to provide end-to-end solutions capabilities to cargo owners.
Auburn Hills, Michigan-based syncreon primarily designs and operates supply chains for the automotive and technology industries. The company provides warehousing and distribution solutions in 91 facilities across 19 countries. Syncreon generated $1.1 billion in revenue during 2020, 57% internationally, mostly in Europe, and 42% in North America.
The deal is expected to close in the second half of 2021, subject to customary closing conditions.
“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,” said Sultan Ahmed Bin Sulayem, DP World group chairman and CEO.
Syncreon’s technology customer segment supports e-commerce and omnichannel fulfillment while the automotive unit provides warehousing, inventory management, kitting and sequencing, and export packaging. The company also provides supply chain and logistics services to the consumer goods, health care and industrial markets.
DP World will fund the transaction with “existing available resources” but still expects to deleverage the balance sheet to less than four times net debt-to-earnings before interest, taxes, depreciation and amortization by the end of 2022.
|Acquisition price||$1.2B (enterprise value)|
|Target revenue run rate||$1.1B|
|Acquirer revenue run rate||$8.5B|
In 2020, DP World reported $8.5 billion in revenue with consolidated throughput of 41.7 million twenty-foot equivalent units. The company generated $3.3 billion in adjusted EBITDA (38.9% adjusted EBITDA margin) and $879 million in profit attributable to the owners.
“Syncreon’s exposure to the sizable, fast-growing technology and automotive industries offers significant growth opportunities over the medium to long term,” continued Bin Sulayem. “We aim to build on this platform to deliver greater scale and provide compelling value-add supply chain solutions to cargo owners across a wider market.”
The deal follows other recent acquisitions by DP World.
Its Unifeeder subsidiary acquired the container feeding and regional logistics segments from Transworld Group in August 2020. A month earlier, it further expanded its logistics offering by acquiring a majority stake in UNICO Logistics after acquiring the largest multipurpose deep-sea marine terminal in Canada (Fraser Surrey Docks) earlier in the year.
Syncreon CEO Brian Enright said the company will benefit from DP World’s “significant expertise in the wider supply chain and excellent relationships with cargo owners. While we have enjoyed great success over the years, we believe being part of DP World will enable us to take the business to other markets.”