3 October 2011
South African industrial group Imperial is to acquire German logistics firm Lehnkering from Lukas Sweden AB for €173-million, in order to grow and diversify its international logistics business and strengthen its position in Germany, its second home market.
The transaction will also see Imperial assume debt of €97-million, taking the total enterprise value to €270-million.
“The management team of Imperial Logistics International is highly experienced and competent players in the European logistics market, and as a result, our base in Germany is ideally suited to be the hub of our international activities outside Africa,” Imperial said in a statement last week.
“The German operations have traditionally delivered excellent returns on capital for the group.”
Lehnkering operates in defensive customer industries, focused mainly around chemicals, and will provide Imperial with an ideal opportunity to expand into global emerging markets that are served by German exports.
“Imperial wished to increase their presence in this industry based on the know-how and experience we have in shipping, contract logistics, distribution and warehousing.”
Outsourcing in the chemicals industry
Lehnkering also provides outsourced services where it synthesises, mixes and packages chemical products on behalf of its clients.
Imperial has experienced a similar evolution in its contract logistics business, Panopa, which started as purely a logistics service provider and over the years became more entrenched in its customer base through sub-assembly on behalf of motor manufacturers.
The trend to outsourcing in the chemicals industry is expected to grow as chemicals suppliers tend to focus on their core business of product development and marketing.
“The Lehnkering acquisition will further improve Imperial’s competitive position in European inland shipping, ports and terminals operations, warehousing and distribution and contract logistics,” the company added.
The acquisition will be funded from new euro denominated banking facilities secured for the acquisition for a period of five years. Imperial has in addition obtained permission from the South African Reserve Bank to fund a portion of the acquisition from its South African operations.
The effective date of the acquisition is expected to be at the end of 2011 or in the first quarter of 2012, subject approval from the necessary regulatory authorities.
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