DP World takes bigger piece of European freight with Unifeeder

A Unifeeder containership at a quay ( Photo: Unifeeder )

Global ports operator DP World made one of its largest acquisitions ever with a €660 million ($765 million) acquisition of Denmark’s Unifeeder Group.

Unifeeder, founded in 1977, operates small-scale containerships ferrying freight between  Northern and Southern Europe, the Mediterranean and the Black Sea. The company provides cargo owners connections to nearly 100 international and regional ports with fully multimodal door-to-door solutions, combining seaborne transportation with road and/or rail. 

Last year saw Unifeeder’s revenue hit €510 million with operating margins in line with other asset-light logistics operators. Private equity firm Nordic Capital has been the majority owner of Unifeeder since 2013. 

DP World said the acquisition will be accretive to earnings in the first full year after completion. DP World plans to finance the acquisition, which will close in the fourth quarter, with cash on hand and available credit. 

DP World says the Unifeeder acquisition will enhance its “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.”

Sultan Ahmed Bin Sulayem, chairman and chief executive of DP World, said the Unifeeder 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,” Bin Sulayem said. 

Unifeeder chief executive Jesper Kristensen echoed the view that his company “will benefit from (DP World’s) significant expertise in the wider supply chain and excellent relationships with shipping lines and end cargo owners.

Since 2006, DP World has been on an aggressive acquisition spree, which now includes 78 marine and inland terminals in 78 countriesd. The Dubai-based company handled 70 million TEU (twenty-foot equivalent units) in container volume across our portfolio. 

With its committed pipeline of developments and expansions, DP World has gross capacity of 88 million TEU which is expected to rise to more than 100 million TEU by 2020, in line with market demand.

DP World is the fifth largest owner and operator of ports worldwide, with an approximate 9% market share. China Cosco Shipping is the largest ports operator in the world at roughly 115 million TEU of capacity representing 12% of global capacity.  Hong Kong’s Hutchison Port Holdings, APM Terminals and PSA Terminals are the next three largest ports operators.   

Last year, the publicly listed DP World saw gross volumes rise 10% to 70.1 million TEU throughout its terminal system, with capacity utilization hitting 73.4%. Company-wide revenue hit $4.7 billion in 2017, a 13% rise over the previous year. But profit attributable to owners rose only 7% to $1.2 billion as operating margins were weaker. 

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Michael Angell, Bulk and Intermodal Editor

Michael Angell covers maritime, intermodal and related topics for FreightWaves. His interest in transportation stretches back several generations. One great-grandfather was a dray horseman along the New York waterfront and another was a railway engineer in Texas. More recently, Michael has written about the shipping industry for TradeWinds, energy markets for Oil Price Information Service, and general business topics for FactSet Mergerstat and Investor's Business Daily. When he is not stuck in the office, he enjoys tours of ports, terminals, and railyards.