SATS Ltd. (SATS) announced it had completed its acquisition of global air cargo logistics provider Worldwide Flight Services (WFS) in €1.3 billion (approximately S$1.8 billion) from an affiliate of Cerberus Capital Management (Cerberus), representing an enterprise value of €2,250 million.
The Singapore-based ground handling and catering provider said the acquisition received the overwhelming support of 96.8% approval from SATS' voting shareholders in January this year and obtained regulatory approvals in all relevant jurisdictions in February.
"With effect from completion, WFS becomes a fully owned subsidiary of SATS, which is headquartered in Singapore," the SATS announcement said, adding that WFS will continue to be headquartered in Paris and operate as Worldwide Flight Services.
It added that Craig Smyth, CEO of WFS, will continue to run the company and report to Kerry Mok, president & chief executive officer of SATS and an advisory board.
SATS noted its strength and WFS' in the aviation industry, with SATS being a leading provider of food solutions and gateway services in Asia, while WFS is a leading air cargo logistics provider globally with ground handling capabilities.
As a combined company, the announcement noted that SATS and WFS would create an Americas-Europe-APAC network with a global footprint of 201 cargo and ground handling stations in 23 countries, covering trade routes responsible for more than 50% of global air cargo volume.
The combined group operates in five of the top 10 cargo airports in North America and Europe, respectively, including Los Angeles, Chicago, Miami, Frankfurt, and Paris, and four of the top 10 cargo airports in Asia, including Hong Kong, Taipei, Singapore, and Beijing.
"Recent global events have highlighted the importance of supply chain resiliency and an interconnected global network of cargo handling capabilities that provides speed, traceability, and certainty to our customers," said
said Mok, president & chief executive of SATS.
"SATS and WFS will provide our customers with the critical global cargo handling capability and the scale advantage for us to develop and pioneer new solutions that will enhance our customers' competitiveness," he added, noting that the focus now is on "accelerating value creation" for its customers over the medium term.
Smyth of WFS, for his part, said the combination with SATS enhances its ability to provide end-to-end trade solutions, which is increasingly critical to its global customers.
"Together, we will drive technology and service innovations while maintaining our industry-leading standards of safety and security. We are very excited about the value we can deliver for customers from our combined capabilities and broader network," he said.
Craig Brooks, senior managing director of Cerberus, noted that over the past four and half years, WFS invested in its technology and operations and has achieved tremendous growth, and persevered through the COVID-19 pandemic.
"This strategic combination with SATS will support the company’s continued success and deliver great value for its customers," he said.
Global air cargo handling platform
SATS earlier signalled that the WFS combination will create a "pre-eminent global air cargo handling platform."
It said then that the acquisition would allow SATS to gain leading positions in strategic hubs connecting key trade lanes across North America and Europe, complementing its operations in Asia Pacific.
SATS noted that acquiring WFS will also enable SATS to expand its capabilities to meet growing demand from customers wanting to transport higher-value goods, including pharmaceutical products, vaccines and specialised cargo, on a global scale.
"WFS will provide SATS with an industry-leading platform from which we can drive future growth and secure greater earnings resilience. The renounceable rights issue allows all shareholders the opportunity to participate in SATS' long-term growth," Mok said earlier.
