Container shipping and logistics company A.P. Moller-Maersk has reached an agreement with Bridgepoint Development Capital to acquire KGH Customs Services, a Sweden-based specialist in trade and customs management services in Europe.
Maersk will acquire KGH for $279 million on a cash and debt-free basis equivalent to a multiple of 16.3 times 2019 EBITDA before synergies, excluding an earn-out component contingent on future Brexit performance. When ramped up, annual EBITDA synergies from the combination are expected to amount to approximately $5.4 million to $8 million.
Maersk said the acquisition will enhance its capabilities as an integrated container logistics company offering end-to-end supply chain solutions to its customers. With its specialized expertise across freight modes and in selected industries, combined with innovative technology, KGH will significantly improve Maersk’s overall offering within customs services, the company said.
KGH has a strategy focused on digital solutions and technology as an enabler for a more seamless customer experience, which also corresponds with Maersk’s own digital transformation journey.
“There are no end-to-end solutions without customs clearance,” Vincent Clerc, CEO of Ocean & Logistics at A.P. Moller – Maersk, said. “With KGH, we will not only be able to strengthen our capabilities within customs services and related consultancy, but also reach more of our customers in Europe through a larger geographical footprint and digital solutions that will enhance our ability to meet our customers’ end-to-end supply chain needs. We achieve all this in one go instead of having to build our expertise through multiple acquisitions.”
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Based in Gothenburg, Sweden, KGH has achieved double-digit annual growth resulting in a revenue of approximately $95.5 million in 2019, recurring earnings before interest, taxes, depreciation and amortization (EBITDA) of approximately $17.2 million and an EBITDA margin of about 18 percent.
“With Maersk, we will have a long-term home with a company that shares our values,” Lars Börjesson, CEO of KGH Customs Services, said. “By joining forces, we will be able to continue to build on the great success our teams have achieved, and at the same time play a key role in a combined entity providing a range of different services within the transportation and logistics industry. Customs services is an essential part of our customers’ end-to-end needs which we in unison with Maersk will be able to provide with seamlessness and global reach.”
With the acquisition of KGH, Maersk said it will have a solid platform for growth in customs services in Europe with own setups operating in 22 European countries with a total of 2.38 million clearances on a yearly basis, 960 specialized employees and combined volume of $109.4 million. The closing of the acquisition is subject to customary regulatory approvals.