DP World has acquired the holding company of P&O Ferries and P&O Ferrymasters for £322 mill.
This implies a 2017 Enterprise Value/EBITDA valuation multiple of 6.1x, DP World said.
P&O Ferries is a trans-European integrated logistics business consisting of ro-ro ferry operations and a European transportation and logistics solutions provider, P&O Ferrymasters.
The company operates a fleet of 21 vessels on the short sea, North Sea and Irish Sea sectors across 11 ports, whilst P&O Ferrymasters is involved in 19 European locations.
P&O Ferries reported FY2017 revenues of £1.1 bill and EBITDA of £100 mill. The acquisition is expected to be earnings accretive from the first full year of consolidation. On a proforma basis, DP World’s net leverage as of 1H2018 would be 2.96x net debt to EBITDA with this acquisition compared to the reported 2.91x.
The transaction is subject to customary completion conditions and is expected to close in the first half of 2019. As the acquisition is considered a related party transaction 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 pleased to announce the return of P&O Ferries back into the DP World family. P&O Ferries is a strong, recognisable brand and adds a best-in-class integrated logistics provider into our global portfolio. Importantly, P&O Ferries provides efficient European freight connectivity building on last year’s acquisition of Unifeeder. This transaction is in line with 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.
“P&O Ferries has delivered a robust performance in recent years and we aim to drive further value through increasing efficiencies and offering value-added solutions to our customers. Overall the transaction offers compelling value strategically and financially, and we look forward to P&O Ferries contributing to driving shareholder value in the coming years,” he added.
Meanwhile, Maritime Union RMT said that the sale of P&O Ferries from Dubai World to Dubai Ports World raised fresh concerns over the future direction of shipping and ports policy in the UK, including the Port of Dover.
Commenting on the announcement, RMT General Secretary, Mick Cash, said: “P&O’s freight and passenger ferry fleet connecting UK and European ports is now entirely registered under flags of convenience.
“For this to be followed by Dubai Ports World taking ownership of these vital routes and ships is of concern to us and our members working from ports up and down the UK, but particularly Dover which remains publicly owned.
“We’ve again received assurances from P&O that no jobs will be affected but this announcement once again demonstrates that regardless of Brexit, neo-liberal economics have the UK’s maritime interests by the throat.
“DP World are expanding in the UK, with ownership of London Gateway and the country’s second largest container terminal in Southampton.
“The strategic aim of this corporate carve up in Dubai is the ownership of more of the UK’s vital ports network, with the creation of so-called ‘free ports’ clearly on the cards.
“Once again, the (UK) Transport Secretary is nowhere to be seen when the UK’s vital maritime interests are carved up and sold off, leaving seafarers, dockers, passengers and businesses facing uncertainty,”he concluded.