Wednesday, January 23, 2019

Container Terminal Manager Obtains Control of Another Port Group as Logistics Development Continues

DP World Expanding Geographical and Transport Sector Interests
Shipping News Feature
AUSTRALIA – Having just last week announced that it was taking a controlling interest in two South American ports, Dubai centred DP World has now acquired an additional stake in container port operator DP World Australia (Holding) Pty Ltd (DP World Australia) from Gateway Infrastructure Investments and other financial investors. The new purchase put the transaction for the company at an enterprise value of approximately A$ 1.4 billion (US$ 997 million). The move follows the recent policy to migrate more of the group's operations into the broader logistics field.

DP World Australia (DPWA) is a leading container port operator that manages 4 terminals at each of Australia’s major ports (Sydney, Melbourne, Brisbane and Fremantle) with a capacity of approximately 4 million TEUs. In 2017, DPWA handled 3.4 million TEUs and generated over US$ 400 million of revenues. In addition to core terminal and stevedoring operations, DPWA says it has a strategy to grow the business ‘beyond-the-gate’ through its vertically integrated logistics solutions via DPW Logistics Australia and a pair of joint ventures, 1-Stop and AWH.

The acquisition is subject to regulatory approval and is expected to close in the first quarter of 2019. Following the closure of the transaction, DP World Australia (DPWA) will become a consolidated entity within the DP World Group and is expected to be earnings neutral in the first full year of ownership. Corsair Infrastructure Partners (CIP), the manager of the Gateway Fund, will continue to manage a significant investment in DPWA. Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World, said:

“We are pleased to announce this transaction that brings DP World Australia back into our consolidated portfolio, which presents a more optimal structure to drive this business forward, while continuing our relationship with CIP as a valued partner. We remain optimistic on the growth prospects in Australia and believe there is an exciting opportunity to enhance shareholder value by further developing the container terminals operations and expanding beyond the ports into logistics services.”

In 2017 it was said that CIP wanted to divest itself of all the investments in the $3 billon Gateway Infrastructure Partners fund before it matures in 2022. CIP sold its 30.3% in Kelda Water that year and also became embroiled in a fight over shares in Spanish toll road manager Itinere where it previously held a 38% share. Its holding in DPWA was 75% before the latest transaction and speaking of this, Hari R. Rajan, Managing Director of Corsair and Head of CIP, said:

“We are pleased to have achieved the exit of Gateway’s investment in DPWA, while maintaining our strong relationship with DP World through our continued management of a large investment in the company. We believe this new shareholder structure will further leverage the global capabilities of DP World and support the continued growth and development of DPWA’s container terminal and other businesses.”