ADNOC Logistics and Services Plc (ADNOC L&S), a global energy maritime logistics company, announced an agreement to acquire Navig8 TopCo Holdings Inc. (Navig8), an international shipping pool operator and commercial management company with an owned fleet of 32 modern tankers and a presence in 15 cities across five continents.
The agreement, which is subject to customary regulatory approvals, will accelerate the ADNOC L&S’s global expansion as it progresses towards its medium-term strategic growth investment target, just one year after its listing.
Under the terms of the agreement, ADNOC L&S will acquire 80% of Navig8 for $1.04 billion (AED3.8 billion) with economic ownership transfer effective from 1 January 2024, and further acquire the remaining 20% ownership in 2027 for a deferred consideration of $335 million to $450 million (AED1.2 billion to AED1.7 billion).
The acquisition will be immediately value accretive, aligning with the ADNOC L&S transformational growth strategy and investment target. The first full year of investment is projected to boost earnings per share by at least 20% for ADNOC L&S shareholders. Moreover, Navig8 delivered over $400 million (AED1.5 billion) EBITDA in 2023, equivalent to 44% of ADNOC L&S’ EBITDA in the same period.
ADNOC L&S will unlock significant value through cost saving synergies, with savings targets of over $100 million (AED367 million) per annum already identified through optimizing technical management costs and bunker spend.
Navig8’s global footprint in 15 cities across five continents, and an owned fleet of 32 modern tankers, will greatly enhance ADNOC L&S’ international profile and expand its blue-chip customer base.
ADNOC L&S’ service offering will include pooling, commercial management, bunker trading, technical management and ESG-focused digital solutions.
Following the successful completion of the acquisition, the current Navig8 management team will continue to operate the business on a day-to-day basis, while maintaining its current operations under the existing Navig8 brand, to ensure continued strength in business performance, while leveraging the complementary benefits of its partnership with ADNOC L&S.
Captain Abdulkareem Al Masabi, CEO of ADNOC L&S, said: “This value accretive acquisition marks another major milestone as we deliver on our transformational growth strategy. The addition of Navig8’s presence in 15 international cities, fleet of tankers and world-class services will expand our geographical footprint and service offering, cementing our position as a leading global energy maritime logistics and services company.”
Last year, at the time of its public listing, ADNOC L&S committed to investing $4-5 billion (AED14.7-AED18.3 billion) over the medium term. Following its strong Q1 2024 financial performance and earnings outlook guidance upgrade, driven by continuing growth in activities across all business segments, the Company revised its growth guidance upwards with the intention to invest in excess of $5 billion (AED18.4 billion) in energy-related maritime logistics over the medium term, to meet growing demand in the UAE and beyond.
A few days ago (May 29), ADNOC L&S signed letters of intent with two South Korean shipbuilders, Samsung Heavy Industries and Hanwha Ocean, for the construction of 3+2 174,000 m3 LNG carriers, respectively, with deliveries expected by the end of 2027 or the beginning of 2028.ADNOC L&S did not disclose the value of the order, but according to sources, the total order for the first six new shipbuildings is about $1.6 billion, with a single-vessel cost of about $267 million.
Currently, ADNOC L&S has a diversified fleet of more than 240 owned and chartered vessels and has signed 25-year exclusive service agreements with all oil ports in Abu Dhabi. Recently, ADNOC has committed to low-carbon LNG investments to enhance its energy transition strategy.