A week after news broke about a potential acquisition that would see a combination of the world’s top ground handlers, Singapore-based catering and gateway services SATS Ltd has announced a proposal to acquire Paris-based air cargo handler Worldwide Flight Services at an enterprise value of €2.25 billion ($2.1 billion).
SATS will acquire WFS from an affiliate of investment firm Cerberus Capital Management (Cerberus) and pay about €1.2 billion (US$1.2 billion) in cash. The deal will be financed with a S$1.7 billion ($1.2 billion) equity fund raising, with the balance coming from internal cash resources, SATS said. The acquisition is expected to close in March 2023.
Temasek Holdings, which owns about a 39.7 percent stake in SATS, has agreed to vote in favour of the acquisition.
“The acquisition will enable SATS to better serve air cargo customers in strategic hubs in Asia, Europe and the US, as well as in complementary new growth markets including Latin America and Africa. The combined network covers trade routes responsible for more than 50% of global air cargo volume,” SATS said in a statement.
Founded in 1971, Paris-based WFS is the world’s largest air cargo handler operating in more than 160 major airports in over 20 countries, according to its website. It operates in five of the top 10 cargo airports in North America and EMEA, including Los Angeles, Chicago, Miami, Frankfurt and Paris. Its annual sales stood at €1.3 billion. Cerberus bought the French firm from Platinum Equity in 2018 for about €1.2 billion, Payload Asia learned.
SATS, on the other hand, is present in four of the top 10 cargo airports in Asia, including Hong Kong, Taipei, Singapore and Beijing.
“This is a transformational opportunity for SATS,” said chief executive Kerry Mok. “Our customers are telling us that they want seamless support across regions. It is a hugely powerful combination for growth.”
WFS will become a wholly owned subsidiary of SATS after the proposed acquisition and will continue to be led by chief executive Craig Smyth, alongside other key members of the senior WFS management team.
The combined group will have a greater ability to capitalise on growth across the cargo supply chain, and benefit from stronger demand for e-commerce and specialised cargo handling for items such as pharmaceuticals and perishables, SATS noted in a statement.