Maersk is set to acquire KGH Customs Services, a Swedish based specialist in trade and customs management services in Europe, from current owner Bridgepoint Development Capital, as part of the group policy to expand it's capabilities as an integrated container logistics company offering all round supply chain services, rather than being seen as just a shipping line.
Maersk says the depth of experience linked to the innovative technology which KGH possesses will significantly improve its own overall offering within customs services as digitalisation continues to play an ever more important role in the seamless movement of cargo.
Vincent Clerc, CEO of Ocean & Logistics at A.P. Moller - Maersk certainly sees KGH as a perfect fit by providing another key building block in his company’s strategic ambitions, saying: “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.”
KGH’s experience has seen it provide consultations and advice to several authorities, including most recently in the connection with Brexit, as advisors to various bodies within the EU and the UK. Double digit growth in past years has meant the Gothenburg headquartered company saw revenues of $95.5 million in 2019, its 775 staff handling 1.98 million clearances.
CEO Lars Börjesson commented: “With Maersk, we will have a long-term home with a company that share our values. 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 says 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 specialised employees and a combined turnover of $109.4 million. Maersk will acquire KGH for a consideration of $279 million 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 $5.4-$8.0 million.
The closing of the acquisition is subject to customary regulatory approvals. Until then, Maersk and KGH remain two separate companies and thus will carry on their respective businesses as usual.