DP World is shelling out an estimated USD 405 million to acquire Dubai’s ship repair business Drydocks World LLC (Drydocks) and Maritime World LLC, the 100% owner of Dubai Maritime City (DMC).
According to sources in the industry, the taking over of the largest ship repair yard in the Middle East, Dry-docks, which specialises in ship and rig repair is dependent on the company’s restructuring process and other factors. The Dubai-based port operator said the purchases would be made by means of a capital injection of USD 225 million.
Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World, 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,”
“Dubai Maritime City provides us with stable leasing income from DMC’s existing industrial zone and spare capacity to develop industrial and commercial activities for the maritime sector in a prime location of Dubai. We aim to develop the best-in class Maritime City serving the needs of the maritime industry and leveraging on our expertise and experience from our ownership of the Jebel Ali Free Zone. We are consequently well positioned to deliver significant value in the medium term.”
“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,” Bin Sulayem added.
“The business delivers stable revenues and has specialist capabilities in niche ship newbuilds and conversions,” DP World said.
DP World added that Drydocks’ acquisition will integrate well into P&O Maritime (POM), which is DP World’s 100% owned maritime services subsidiary. On a proforma basis, the USD 225 million capital injection into Drydocks World represents a 2016A EBITDA multiple of 8.0x. DMC, adjacent to DP World’s Port Rashid, is a maritime-focused commercial and industrial park, which extends to 2.3 million sqm on a man-made peninsula and provides Economic Zones World FZE additional land as an alternative to the highly-occupied Jebel Ali Free Zone.