DP World agrees deal to buy Danish logistics firm Unifeeder for $762mn
DP World has acquired the Danish logistics firm Unifeeder Group for $762mn after agreeing a deal with Nordic Capital Fund VIII and certain minority shareholders.
Based in Aarhus Denmark, Unifeeder operates the largest and most densely connected common user container feeder and an important and growing shortsea network in Europe, serving both deep-sea container hubs and the intra-Europe container freight market.
The group reported revenue of €510 million in 2017 and EBIT margins in line with other asset-light logistics operators. The acquisition is subject to regulatory approvals and expected to be earnings accretive in the first full year after completion.
It will be financed from existing balance sheet resources and is expected to close in 4Q 2018.
The acquisition of Unifeeder will further enhance DP World’s 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, Group Chairman and CEO, DP World, said: “We are delighted to add the Unifeeder brand under the DP World umbrella, which 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. Our aim is to leverage on the in-house expertise of Unifeeder and to accelerate growth in this scalable platform to deliver value for all stakeholders.”
Jesper Kristensen, CEO, Unifeeder A/S, said: “We are excited to join the DP World Group as we believe that Unifeeder will benefit from the group’s significant expertise in the wider supply chain and excellent relationships with shipping lines and end cargo owners.
“Not only is there commonality with our business models but we also share the vision of serving our customers through removing inefficiencies and delivering sustainable shareholder value.
“We have enjoyed great success over the last five years under Nordic Capital’s ownership, and we believe that the Unifeeder brand within the DP World Group has the opportunity to accelerate growth, expand further and take the business to the next level.”
Elon Musk's Boring Co. planning wider tunnels for freight
Elon Musk’s drilling outfit The Boring Company could be shifting its focus towards subterranean freight and logistics solutions, according to reports.
A Boring Co. pitch deck seen and shared by Bloomberg depicts plans to construct wider tunnels designed to accommodate shipping containers.
Founded by Tesla CEO Musk in 2016, the company initially stated its mission was to offer safer, faster point-to-point transport for people, particularly in cities plagued by traffic congestion. It also planned longer tunnels to ferry passengers between popular destinations across the US.
The Boring Co. completed its first commercial project earlier this year in April. The 1.7m tunnel system is designed to move professionals between convention centres in Las Vegas using Tesla EVs. It says the Las Vegas Convention Centre Loop can cut travel time between venues from 45 minutes to just two.
Boring Co.'s new freight tunnels
The Boring Co.'s new tunnel designs would allow freight to be transported on purpose built platforms, labelled as “battery-powered freight carriers”. The document shows that, though the containers could technically fit within its current 12-foot tunnels, wider tunnels would be more efficient. Designs for a new tunnel, 21 feet in diameter, show that they can comfortably accommodate two containers side-by-side, with a one-foot gap between them.
The Boring Co.’s new drilling machine, dubbed Prufrock, can tunnel at a rate of one mile per week, which is six times faster than its previous machine, and is designed to ‘porpoise’ - mimicking the marine animal by ‘diving’ below ground and reemerging once the tunnel is complete.
Tesla’s supply chain woes
Tesla is facing its own supply chain and logistic issues. The EV manufacturer has raised the price of its vehicles, with CEO Musk confirming the incremental hike was a result of “major supply chain pressure”. Musk replied to a disgruntled Twitter user, confused as to why prices were rising while features were being removed from the cars, saying the “raw materials especially” were a big issue.
Car manufacturing continues to be one of the industries hit hardest by a global shortage in semiconductor chips. While China’s chip manufacturing levels hit an all-time high in May, and the US is proposing a 25% tax credit for chip manufacturers, demand still outstrips supply. Automakers including Volkswagen and Audi have again said they expect reduced vehicle output in the next quarter due to a lack of semiconductors, with more factory downtime likely.
Top Image credit: The Boring Company / @boringcompany