DP World to Acquire Dubai Maritime City and Drydocks World
DP World, a global trade enabler, has entered into agreements to acquire Maritime World, the 100 per cent owner of Dubai Maritime City (DMC) for a purchase consideration of $180 million and to buy 100 per cent of Drydocks World by means of a capital injection of $225 million.
DMC is a world class maritime service facility and industrial business zone in a prime location of central Dubai and adjacent to DP World’s Port Rashid. It is a maritime focused commercial and industrial park, which extends to 2.3 million sq m on a man-made peninsula and provides Economic Zones World FZE additional land as an alternative to the highly-occupied Jebel Ali Free Zone.
Drydocks World is a market leader in the ship repair business with the largest ship repair yard in the Middle East. The business delivers stable ship and rig repair revenues and has specialist capabilities in niche ship new builds and conversions. Drydocks’ acquisition will integrate well into P&O Maritime (POM), which is DP World’s 100 per cent owned maritime services subsidiary. On a proforma basis, the $225 million capital injection into Drydocks World represents a 2016A EBITDA multiple of 8.0x.
The acquisitions are expected to be earnings accretive from the first full year of consolidation. On a proforma basis, DP World’s net leverage as of 1H2017 would be 2.9x Net Debt to EBITDA with these acquisitions compared to the reported 2.6x.
Both acquisitions are subject to certain conditions precedent and the acquisition of Drydocks World is subject to the successful completion of its debt restructuring process. Both transactions are expected to close before the end of the first quarter of 2018.As the acquisitions are considered related party transactions under the DFSA Market Rules, DP World will comply with the relevant requirements of DFSA Market Rule 3.5.3.
Sultan Ahmed Bin Sulayem, Group chairman and CEO, DP World, said: “We are delighted to make these acquisitions which further strengthen the Group’s maritime services and port related businesses. As a global trade enabler, we have been targeting a broader strategy to grow complementary sectors in the global supply chain such as industrial parks, freezones and logistics adding further value for all our stakeholders.
“Dubai Maritime City provides us with stable leasing income from DMC’s existing industrial zone and spare capacity to develop industrial and commercial activities for the maritime sector in a prime location of Dubai. We aim to develop the best-in class Maritime City serving the needs of the maritime industry and leveraging on our expertise and experience from our ownership of the Jebel Ali Free Zone. We are consequently well positioned to deliver significant value in the medium term.”
“Drydocks World bolsters our investment in the maritime sector through our subsidiary P&O Maritime. We are acquiring a market leader in the Middle East with the potential to deliver near term synergies and new revenue opportunities over the longer term, particularly in ship conversion and in areas where POM has existing expertise. We remain excited about the growth prospects of this business.
“Overall, these transactions will enhance our position as a leading maritime services provider, and we look forward to leveraging on our proven track record to accelerate growth and deliver stakeholder value,” Bin Sulayem added.
Source: Trade Arabia
We began life as a local port operator with our first project, the development of Dubai’s Port Rashid, in 1972. Seven years later we opened Jebel Ali Port, the busiest port outside of Asia and a facility that has propelled us on our journey to becoming a leading enabler of global trade.
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