Maersk announces that it has reached an agreement with Bridgepoint Development Capital to acquire KGH Customs Services (KGH), a Sweden-based specialist in trade and customs management services in Europe. Maersk is growing its capabilities as an integrated container logistics company, offering end-to-end supply chain solutions to its customers.
Maersk hopes KGH will significantly improve its overall offering within customs services with its expertise across freight modes (air, ocean, land) and knowledge in selected industries, combined with innovative technology. 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.
Vincent Clerc, CEO of Ocean & Logistics at A.P. Moller – Maersk sees KGH as a perfect fit to Maersk offerings within logistics and services as well as another key building block in its strategic ambitions.
There are no end-to-end solutions without customs clearance. 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,” says Vincent Clerc, CEO of Ocean & Logistics at A.P. Moller – Maersk.
Based in Gothenburg, Sweden, KGH is a well-known and respected partner to a wide range of authorities, providing valuable consulting and advice, most recently in the connection with Brexit, as advisors to various authorities in the EU and the UK. KGH has in the past years achieved double-digit annual growth resulting in a revenue of approximately SEK 890m in 2019 (USD 95.5m), recurring EBITDA of approximately SEK 160m (USD 17.2) and an EBITDA margin of approximately 18 percent. KGH has 775 employees and a yearly business of 1.98m clearances.
With the acquisition of KGH, Maersk will have a solid platform for growth in customs services in Europe with own setups operating in 22 European countries with a total of 2.38m clearances on a yearly basis, 960 specialised employees and a combined turnover of SEK 1.02B (USD 109.4m).
Maersk will acquire KGH for a consideration of SEK 2.6B (USD 279.0m) on a cash and debt free basis equivalent to a multiple of 16.3x 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 SEK 50m-75m (USD 5.4m-USD 8.0m).
The closing of the acquisition is subject to customary regulatory approvals. Until then, Maersk and KGH remain two separate companies and thus will do their business as usual.
Photo: Bari Bookout/ Wikimedia Commons