- Maersk to acquire Senator International for US$644 million
- The transaction is expected to close in the first half of 2022
- Maersk will also lease three cargo planes, which will be operational from 2022, and order two newbuilding Boeing aircraft, to be deployed by 2024
Integrated logistics container giant A.P. Moller-Maersk continues its march into airfreight territory as it announced its intention to acquire global freight forwarder Senator International and add five aircraft to its operations.
“Air freight is a crucial enabler of flexibility and agility in global supply chains as it allows companies to tackle time-critical supply chain challenges and provides transport mode options for high value cargo. To better cater to customers’ needs, Maersk aims to increase its presence in the global air cargo industry,” said the Hamburg-based company in a release.
The German shipping and transport giant said it aims to acquire compatriot Senator International, which derives 65% of its revenue from air freight, as well as lease three cargo planes, which will be operational from 2022, and order two newbuilding Boeing aircraft, to be deployed by 2024.
These actions are meant to accelerate the integration of Maersk’s logistics, ocean, tail and air offerings and expand its global air network, the release said.
It noted that Senator International is renowned for its operational air freight platform of own controlled capacity and operations with 19 weekly flights across its network spanning Europe, Asia, South Africa, and America.
In addition, Maersk is purchasing two new B777F and leasing three B767-300 cargo planes. To operate and manage this added capacity, the cargo airline Star Air—the internal air cargo operation of Maersk established in 1987—will become a key vehicle supporting Maersk’s logistics offering.
Maersk started its expansion into air freight with multiple chartered airplanes moving cargoes for a leading tire manufacturer from Thailand to Japan on October 11, 2020.
On Senator’s acquisition, Vincent Clerc, executive vice president and CEO of ocean and logistics at Maersk, said this is part of Maersk’s improving its ability to provide a one-stop shop and end-to-end logistics capabilities to its customers.
“We have strengthened our integrated logistics offering through E-commerce logistics acquisitions, tech investments, expanding our warehouse footprint and, as a natural next step, we are now ramping up our air freight capacity significantly and creating a broader network to cater even better for the needs of customers.”
Tim-Oliver Kirschbaum, CEO and shareholder at Senator, said the company, founded by his father in 1984, has grown to a sizable global freight forwarder, whose own controlled air product started in 2016 and became a success story.
“Senator has built a renowned airfreight operation centered around own controlled capacity using nineteen weekly flights across its network. Senator operates a significant part of their business through a dedicated air bridge with own controlled capacity and ensuring a high service level for its customers. This focus on own controlled capacity is highly aligned with Maersk’s air freight strategy,” said Maersk.
Senator brings a technology advantage with its Cargo Wise One core operating platform, a cutting-edge yet easy-to-use single system which will accelerate the integration with Maersk’s air and LCL (less than container load) products, Maersk said.
The enterprise value of the transaction on a post-IFRS 16 basis is approximately US$644 million. The transaction is subject to closing conditions including regulatory approvals and is expected to close in the first half of 2022.
Maersk said its ambition is to have approximately one-third of its annual air tonnage carried within its own controlled freight network through a combination of owned and leased aircraft, replicating the structure the company has within its ocean fleet. The remaining capacity will be provided by strategic commercial carriers and charter flight operators.
As an in-house aircraft operator, Star Air will operate and maintain owned and leased aircraft for Maersk while continuing to operate air cargo for its current customers.
To build its own controlled air capacity, Star Air has purchased two new B777 freighters to be delivered by Boeing in 2024 and leased three B767-300 freighters which will be operational next year through Cargo Aircraft Management, the leasing arm of Air Transport Services Group.
Senator is owned and led by the Kirschbaum family, which founded the company in 1984. It has over 1,700 employees across a global network with 64 offices in 21 countries across Europe, the Americas and Asia. It operates across three segments: air freight (65% of 2020 revenue), ocean freight (30% of revenue) and logistics and packaging (5% of revenue).
In 2020, Senator realized revenues of around $730 million and post-IFRS 16 adjusted EBITDA of about $50 million. For 2021, it is expected to realize revenues of about $950 million and adjusted EBITDA above $80 million.
Headquartered in Dragor, Denmark on the premises of Copenhagen Airport, Star Air currently operates a fleet of 15 aircraft.
Photo by Andres Canavesi on Unsplash
