UPDATE 1-DSV shares reach all-time high after completing Agility deal
COPENHAGEN, Aug 16 (Reuters) – DSV on Monday raised its outlook for the year after having completed its $4.8 billion acquisition of Kuwait’s Agility Public Warehousing Co, sending its shares to a record high.
The acquisition, announced in April here, of the logistics division of Kuwait’s Agility Public Warehousing Co will create the world’s third-largest freight forwarding firm with a combined workforce of more than 75,000 employees.
Chief Executive Jens Bjorn Andersen told Reuters in an interview that he expects the integration of Agility to be completed by mid-2022, by when he would be ready for new acquisitions.
It will see DSV overtake Germany’s DB Schenker, putting it behind only DHL Logistics and Swiss-based Kuehne & Nagel as measured by revenue and freight volumes.
The Danish company raised its 2021 operating profit outlook for the fourth time this year on the back of strong freight demand. DSV now expects 2021 earnings before interest and tax of 13.75-14.50 billion Danish crowns compared to a previous forecast of 12.5-13.0 billion, with some 750 million crowns related to the acquisition.
“Demand is strong and there is good growth in freight volumes,” Andersen said, pointing to congestion in ports, ships blocking the Suez Canal and lack of containers.
Shares in DSV rose as much as 3.2% to an all-time high.
Global logistics networks have been upended over the past year by disruptions due to COVID-19, reduced air activity and major congestion at ports due in part to backed-up container ships.
DSV has a strategy of growing via acquisitions, and the Agility deal will give it a stronger presence in the Middle East and Asia.
$1=6.3096 Danish crowns Reporting by Stine Jacobsen and Jacob Gronholt-Pedersen; editing by Jason Neely and Emelia Sithole-Matarise