DP World’s subsidiary acquires 77% stake in Feedertech Group; to cater North African market
Unifeeder, a 100 percent subsidiary of DP World, has announced the acquisition of a 77 percent stake in Feedertech Group.
December 05, 2019: Unifeeder, a 100 percent subsidiary of DP World, has announced the acquisition of a 77 percent stake in Feedertech Group. The transaction value is less than 1 percent of DP World’s net asset value (NAV) and is expected to close in Q1 2020. Ali Maghami, the founder of Feedertech will retain the remaining 23 percent and remain involved in the business.
Unifeeder will now have the capability to offer feedering and regional short-sea connectivity in Northern Europe, Mediterranean, Northern Africa, Asia, and the Indian subcontinent.
Founded in 2003, the Singapore-based company operates two businesses - Feedertech, which is an independent feedering service; and Perma, a regional short-sea network. Both operate in the same market and connect the fast-growing trade route of Asia-Middle East via the Indian subcontinent. Similar to Unifeeder, Feedertech operates as an asset-light, independent common-user platform that focuses on flexibility and reliability. The group generates annual revenues of over $100 million from a diversified customer mix, calls at 50 ports and transports over 600k twenty-foot equivalent units (TEUs) annually.
This transaction will broaden the group’s feedering and short-sea product offering to multiple geographies and further enhance DP World’s logistics capability to offer an end-to-end solution to both the shipping lines and cargo owners. It also adds exposure to a fast-growing trade route between Asia, the Indian Subcontinent and Middle-East.
Sultan Ahmed Bin Sulayem, group chairman and CEO, DP World, said, This transaction is another strategic step in our vision to build end-to-end logistics capability. Feedertech has a strong reputation as a reliable independent feeder and regional short-sea operator and we are delighted to add this asset to our portfolio. Furthermore, it offers us exposure to the faster-growing coastal short-sea trade in the Indian subcontinent, which is highly complementary to our existing India logistics strategy. The next and imminent stage of this development will be to launch a dedicated efficient India-Gulf region service, which is an important route for our customers. When we acquired Unifeeder, we stated that we will create additional value through using Unifeeders management expertise to replicate this asset-light model in other geographies and this transaction is the first stage of this value creation process. We aim to preserve the common-user independent platform while reducing inefficiencies to offer a more complete logistics solution to all our customers. “
Maghami stated, “Feedertech has enjoyed great success over the years and we are proud of our achievements, but we believe the transaction with Unifeeder with the support of DP World, will allow us to take the business to the next stage of its growth. Both Feedertech and Unifeeder share similar business models and a desire to reduce inefficiencies, and by combining the expertise of the two entities, we believe we can deliver a high-quality product for our customers. Furthermore, being part of the DP World family will allow us to benefit from the group’s deep relationship with end-customers and wide global network. We look forward to a prosperous future together.”