Maersk completes LF Logistics acquisition for $3.6bn

Danish carrier A.P.Moller-Maersk (Maersk) announced the completion of its acquisition of 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. LF Logistics will be rebranded to Maersk, says an official announcement from Maersk.

"I am thrilled to welcome LF Logistics to Maersk," says Ditlev Blicher, Regional Managing Director, Asia Pacific, Maersk. "Maersk in Asia has historically been primarily focused on ocean transportation out of Asia and related logistics services. With the addition of LF Logistics, Maersk gains unique and best in class capabilities to servicing the important and fast-growing consumer markets in Asia. Furthermore, LF Logistics expertise in omnichannel fulfilment positions us well with the global e-commerce market."

Following the acquisition, Maersk will add LF Logistics's 223 warehouses at the end 2021 to the existing portfolio, bringing the total number of facilities to 549 globally, spread across a total of 9.5 million square metres, the release added.

LF Logistics employs 10,000 people, and specialises in B2B and B2C distribution solutions within retail, wholesale, and e-commerce, and has a track record of deep customer relations and operational excellence, which is a strong base for Maersk to expand within Asia-Pacific and globally.

"LF Logistics has an enviable track record of profitable growth in the region for more than two decades," says Joseph Phi, CEO, LF Logistics. "Maersk's global presence provides an ideal platform for our next phase of organisational expansion and development. The unique and complementary strengths of the two companies will allow our customers to achieve sustainable competitive advantage and our people to attain their full potential. We look forward to a seamless transition experience for both our colleagues and customers."

The value of the transaction is $3.6 billion (enterprise value) post-IFRS 16 lease liabilities, reflecting a pre-synergy EV/EBITDA multiple of 14.2x based on actual EBITDA for full-year 2021 for the in-country logistics business. "Driven by the organic growth and commercial synergies, it is expected that revenue and EBITDA in the in-country logistics business will more than double by the end of full-year 2026."

In addition, an earn-out with a total value of up to $160 million related to future financial performance has been agreed as part of the transaction, the release added.