Maersk Acquires Danish Company to Add Global Project Logistics
Maersk is continuing to use its strong financial results and cash generated from operations to pursue its strategy to become a fully integrated container logistics company. The company has announced a series of acquisitions targeting its logistics segment and air cargo and today announced yet another acquisition this time of a Danish-based project logistics company that adds new capabilities to Maersk.
The parent company of the shipping line, A.P. Moller – Maersk has agreed to acquire a logistic provider that specializes in project logistics called Martin Bencher. Founded in 1997, Maersk reports its core capability is designing end-to-end project logistics solutions for global clients. The company´s competitive strengths are said to include deep industry expertise, a solid track record, long-term stakeholder relationships as well as a highly-skilled organization.
The enterprise value for the transaction was announced at $61 million post accounting for lease liabilities under international accounting standards. The strength of the shipping operations is providing Maersk with the financial capabilities to pursue these acquisitions. In the most recent quarter, Maersk reported this week that free cash flow more than doubled year-over-year to $6.8 billion. The shipping operation generated $8.6 billion in cash which was also used for capital expenditures, lease payments on vessels and aircraft, and in the company’s share repurchase program. For the full year, Maersk forecast that its free cash flow is expected to be above $24 billion in 2022.
With the intended acquisition of Martin Bencher, Maersk reports it will also introduce a new product, Maersk Project Logistics. Previously, Maersk had a niche offering in the business based mainly in Europe and North America. The company looks to rebrand the acquisition to Maersk and expand into a global offering in project logistics.
Project logistics is a specialized service offering within the global logistics industry that covers the combination of solution design, special cargo transportation, and project management services - including detailed planning, orchestration, and sequencing of end-to-end shipments from suppliers to destination sites.
“Martin Bencher will be an excellent fit for Maersk and our integrator strategy, strengthening our ability to provide project logistics services to our global clients,” said Karsten Kildahl, Regional Managing Director in Europe of Maersk. “When Martin Bencher joins the Maersk family, we will be able to deliver project logistics services with a high degree of reliability, a proven track record, and a strong focus on Health, Safety, Security and Environment (HSSE).“
Maersk explains that project logistic services require managed transportation capabilities with deep technical specialist knowledge around specific supply chain elements such as handling of oversized and special lift cargo, conducting road surveys, and delivery planning as well as offload and assembly of the equipment on sites. The company believes that a strong project logistics solution offering is a key element for clients with logistics requirements for large-scale projects across several industry segments, including renewable energy, pulp and paper, power generation, mining, automotive, aid and relief, government contracted logistics, and industrial manufacturing.
Maersk has been moving aggressively to build out its logistics offering. The company said in this week’s second quarter earnings report that the acquisitions of Pilot Freight Services and Senator International had both been completed while the company launching its Maersk Air Cargo branded service.
CEO Søren Skou told investors that logistics volumes were growing above the market rate as ocean shipping customers continue to adopt the services. Revenues from the logistics segment of the business were up 61 percent to $3.5 billion due he said to higher volumes from new customer wins and increased spending from existing customers. Skou said that Maersk is maintaining its strong momentum in bringing integrated logistics solutions to customers and that the company will continue to invest in its logistics portfolio and capabilities.