Inchcape Shipping Plans Acquisitions After Takeover by UK Investors
An agreement has been reached for UK-based private equity investment firm Epiris to acquire Inchcape Shipping a leader in port agency and marine services. According to the companies, the new investment comes as Inchcape is building back after overcoming the logistical challenges of the Covid-19 pandemic and positions the company to pursue industry consolidation through acquisitions to strengthen its port agency business as well as opportunities in the maritime data segment.
“Inchcape is a global leader in a resilient market experiencing long-term growth, driven by ship owners’ and operators’ focus on cost effectiveness, sustainability, and compliance,” said Charles Elkington, Partner at Epiris. “Frank and his team have made great strides towards building on this favorable backdrop – initiatives they have introduced include, for example, the SmartPay international payments system – and we look forward to working with them to grow the business further.”
Terms of the transaction were not announced but it concludes a sale process by Inchcape’s former owners, Dubai-based Istithmar. The investment firm acquired Inchcape in 2006 predicting that it would double the company’s earnings in the following five years. Twelve years later in 2018, they made the strategic decision to divest of the freight forwarding business reporting that there were limited synergies and they believed the best opportunities were with the port and marine businesses. Today, Inchcape reports that it operates in over 60 countries with a network of over 240 offices.
According to chief executive Frank Olsen the new ownership positions the company to “embark on a new era of growth,” pointing to the opportunities in the currently fragmented shipping services market. “Inchcape has demonstrated its resilience as a stalwart provider of maritime services to keep international trade flowing over nearly two centuries of tumultuous global change while evolving in step with the changing demands and challenges of the shipping industry,” says Olsen. “Inchcape can now move forward with the deployment of capital to realize its strategic goal to become an aggregated platform in the maritime services industry and thereby accelerate the realization of benefits for our customers.”
He highlights the fact that Inchcape is building, with digitalization and decarbonization core to its future growth strategy at an inflection point for the shipping industry. Inchcape, he says has pioneered the use of digital technology in port agency services in support of improved operational efficiency, transparency, compliance, and environmental, social, and governance principles towards the goal of sustainability.
Inchcape sees digitalization along with data-sharing as an important element in its transparency drive for increased visibility of operational data, costs, and integrated compliance to achieve improved operating efficiency, cost savings, and a collective sustainability effort. Olsen explains digitalization is the enabler for operational measures such as better voyage planning and faster port turnaround that are key to the decarbonization of shipping as they can reduce fuel consumption, thereby improving environmental sustainability.
The acquisition by Epiris also returns the company to its British roots. The company traces its origins to 1847 and Scottish merchants William Mackinnon and Robert Mackenzie before being renamed in the last century under the ownership of the Inchcape family from Scotland.