SINGAPORE, Sept 28 (Reuters) - Singapore-based ground
handling and catering provider SATS Ltd is acquiring
Paris-based Worldwide Flight Services (WFS) for 1.19 billion
euros ($1.14 billion) cash in its largest ever deal, to create
the world's biggest global air cargo handler.
The combined entity's network covers trade routes
responsible for more than 50% of global air cargo volume, the
companies said in a statement on Wednesday.
SATS' CEO Kerry Mok called the deal "a transformational
opportunity for SATS," saying it would create a global leader.
SATS said the transaction values WFS at an enterprise value
of 2.25 billion euros and it would raise S$1.7 billion in equity
to fund the purchase.
SATS is buying WFS from an affiliate of U.S. private equity
firm Cerberus Capital Management.
It said the deal would propel the group to the number one
spot in an industry that includes aviation services firm
Swissport and global airport and travel services business dnata.
SATS has a market value of S$4.35 billion ($3 billion) and
counts Singapore state investor Temasek Holdings as its single
biggest shareholder, according to Refinitiv data.
SATS said Temasek, which holds a 41% stake, had provided an
irrevocable undertaking to vote in favor of the transaction.
Last week, Bloomberg News reported that SATS had sounded out
financing for a possible deal that could be worth about $3
SATS had told the Singapore bourse that it was in talks to
buy WFS but said the Bloomberg report contained "materially
Trading in shares of SATS, which have dropped 5.4% over the
past week, was halted earlier on Wednesday.
SATS said the purchase would be "immediately financially
accretive" on a proforma basis and raise SATS' earnings per
share by 78% to 3.2 Singapore cents from 1.8 cents reported for
the year to March, and increase revenue by more than 200%.
WFS reported 1.722 billion euros in revenue and earnings
before interest, taxes, depreciation, and amortization of 232
million euros for the year ended March 2022.
Founded in 1984, WFS is the world's largest air cargo
logistics provider and a major provider of ground handling and
technical services. It has more than 300 customers and employs
32,300 staff, the company said.
SATS said it had committed funding in place to finance the
purchase of WFS through an acquisition bridge facility. The base
funding plan comprises internal cash and an equity fundraising
from existing shareholders and new strategic investors.
The deal is expected to be completed by March 2023.
BofA Securities is the lead financial adviser on the deal
while DBS Bank is the financial adviser.
($1 = 1.0458 euros)
($1 = 1.4468 Singapore dollars)
(Reporting by Yantoultra Ngui; Writing by Anshuman Daga;
Editing by Muralikumar Anantharaman and Elaine Hardcastle)