DP World to acquire Chile port operator
Company to offer $502m in consideration for equity ownership
DP World announced yesterday it will be initially acquiring a 71.3 per cent stake in Puertos y Logistica, a ports services firm in Chile, as the Dubaibased operator expands its presence in Latin America.
The Chilean company, known as ‘Pulogsa,’ is listed on the Santiago stock exchange, and the acquisition will be via an offer to eventually acquire all outstanding shares of the business. DP World will offer $502 million (Dh1.84 billion) in consideration for 100 per cent equity ownership.
The company said in a statement that the acquisition will be financed from existing balance sheet resources.
The deal is subject to third party consent, and is expected to be finalised in the first half of 2019.
Sanat Sachar, equity research analyst at Al Mal Capital’s asset management division, said the acquisition is another step towards building a global trade network for DP World, and will strengthen the company’s position in Latin America.
“We believe, financially, this will have a limited impact on the company as it will contribute only 2 per cent to their overall EBITDA [Earnings before interest, tax, depreciation and amortisation] and this acquisition can be funded easily by internal cash flow without impacting any future growth plans,” he said via email.
DP World will buy Pulogsa from Minera Valparaiso and other shareholders associated with the Matte Group.
Sultan Ahmad Bin Sulayem, group chairman and chief executive officer of DP World, described Chile as Latin America’s most developed economy, “with attractive growth prospects.”
“The overall value proposition for these terminals is compelling and the addition of capacity to our portfolio will help drive long-term value to all our stakeholders,” he said. “These new assets will allow DP World to serve cargo owner and shipping lines at five key gateways on the west coast of South America in Posorja (Ecuador), Callao and Paita (Peru), and San Antonio and Lirquen (Chile).”