A. P. Moller - Maersk to acquire LF Logistics, a premium omnichannel fulfilment company
A.P. Moller - Maersk (Maersk) has reached an agreement to acquire LF Logistics, a Hong Kong-based contract logistics company, with premium capabilities within omnichannel fulfilment services, e-commerce, and inland transport in the Asia-Pacific region, according to the company's release.
LF Logistics, with its Asia-Pacific wide footprint and industry leading fulfilment capabilities, matches Maersk’s strategic intent to support customers’ supply chain needs end-to-end as a trusted partner in control of the assets. With the intended acquisition, Maersk will add 223 warehouses to the existing portfolio, bringing the total number of facilities to 549 globally, spread across a total of 9.5m square meters.
As part of the agreement to acquire LF Logistics, Maersk will enter a strategic partnership with Li & Fung to develop logistics solutions.
LF Logistics operates an extensive Pan-Asian network and is the supply chain partner of choice for companies looking to grow in the Asia-Pacific region. LF Logistics specialises in B2B and B2C distribution solutions within retail, wholesale, and e-commerce. LF logistics’ deep customer relations and operational excellence is a strong base for Maersk to expand within Asia-Pacific and globally.
About LF Logistics
LF Logistics is a privately owned company by Li & Fung (78.3%) and Temasek Holdings (21.7%). LF Logistics is organized through two business units: In-Country Logistics (ICL) and Global Freight Management (GFM). Founded in 1999 LF Logistics is primarily focused on providing contract logistics solutions to customers in Asia-Pacific. LF Logistics is run as a standalone company separate from Li & Fung. Over the last 22 years, LF Logistics has significantly expanded its geographic presence, with an intention of providing integrated logistics solutions to customers across Asia-Pacific. LF Logistics employs 10,000 people and has 223 warehouses and fulfilment centres in 14 countries totalling 2.7 million sq. meters.
The value of the transaction is USD 3.6bn (enterprise value) post-IFRS 16 lease liabilities, reflecting a pre-synergy EV/EBITDA multiple of 14.4x based on estimated EBITDA for full-year 2021 for the ICL business. In addition, an earn-out with a total value of up to USD 160m related to future financial performance has been agreed as part of the transaction.
The acquisition is subject to regulatory approvals and is expected to close in 2022. Until obtaining all required regulatory approvals and closing of the transaction, Maersk and LF Logistics remain two separate companies and thus will do their business as usual.
As part of transaction to acquire LF Logistics, Maersk has entered a strategic partnership with Li & Fung to develop a comprehensive range of end-to-end global supply chain services with Li & Fung focusing on the upstream supply chain and Maersk focusing on the downstream supply chain. Further, the parent company of Li & Fung is expected to retain and continue to build the carved-out GFM business following completion of the transaction.
About A.P. Moller - Maersk
A.P. Moller - Maersk is an integrated container logistics company working to connect and simplify its customers’ supply chains. As the global leader in shipping services, the company operates in 130 countries and employs about 95,000 people.