Dubai: DP World announced on Monday that it has agreed to acquire Maritime World, the owner of Dubai Maritime City (DMC), for $180 million (Dh661 million), and Drydocks World for a capital injection of $225 million.
Both acquisitions are subject to conditions, and the acquisition of Drydocks World is subject to the successful completion of its debt restructuring process, DP World said in a press statement. The acquisitions are expected to close before the end of the first quarter of 2018.
The firm said the acquisitions are expected to be earnings accretive — that is, to add value to its earnings — from the first full year of consolidation.
DP World Group Chairman and DP World CEO Sultan Bin Sulayem said, “As a global trade enabler, we have been targeting a broader strategy to grow complementary sectors in the global supply chain such as industrial parks, free zones and logistics adding further value for all our stakeholders.”
DP World’s share price on Nasdaq Dubai rose 1.14% on Tuesday, from $22.00 to $22.25, during Monday’s trading.
Marwan Haddad, portfolio manager at Al Mal Capital, said he felt the firm’s stock was still undervalued, “This is a lot of capital for them, but they remain one of my favourite investments.
“I believe they have proven that they add value to acquisitions over and over again.”
Haddad said the move might allay investors concerns over a slowdown in growth at Jebel Ali, which accounted for about half of DP World’s profitability.
Bin Sulayem said the acquisition of DMC, a maritime service facility and business zone adjacent to DP World’s Port Rashid, would prvide a stable leasing income from existing facilities “and spare capacity to develop industrial and commercial activities for the maritime sector in a prime location of Dubai”.
He added that Drydocks World would integrate well with DP World’s maritime services subsidiary, P&O Maritime (POM),
“Drydocks World bolsters our investment in the maritime sector through our subsidiary P&O Maritime. We are acquiring a market leader in the Middle East with the potential to deliver near-term synergies and new revenue opportunities over the longer term, particularly in ship conversion and in areas where POM has existing expertise.
“Overall, these transactions will enhance our position as a leading maritime services provider, and we look forward to leveraging on our proven track record to accelerate growth and deliver stakeholder value.”
