Global Ports Investments PLC announced yesterday that it has acquired 100% of the share capital of NCC Group Limited, for a cash consideration of US$291.0 million and new shares representing approximately 18% of its share capital.

The sellers are Ilibrinio Establishment Limited and Polozio Enterprises Limited.

The acquisition of NCC Group, the second largest container terminals operator in Russia, strengthens Global Ports' leading position in the growing Russian container market and provides potential for greater operational efficiency through improved terminal network management and a reduction in overhead costs as well as the centralisation of support functions. In addition, the enlarged group will have approximately 1.124 million TEU of available capacity enabling it to accommodate throughput growth while reducing the Group's CAPEX outlays for the next few years. The combination of NCC Group and Global Ports will enable shipping line customers to benefit from network savings through improved call rationalization, improved berth utilisation and enhanced productivity.

NCC Group's container terminal operations are located on the Baltic Sea, the principal gateway for Russian containerized cargo. Its key assets include 100% ownership of First Container Terminal (FCT) in St. Petersburg, 80% ownership of the recently launched Ust-Luga Container Terminal (ULCT) in the port of Ust-Luga and 100% ownership of Logistika-Terminal (LT), an inland container terminal located close to St. Petersburg which serves primarily as an inland container yard for FCT. As at the end of 2012 NCC Group's marine terminals' annual container handling capacity was approximately 1.69 million TEUs which can be significantly expanded in response to market demand. NCC Group's inland container facility has a capacity of 200,000 TEUs. In 2012 NCC Group generated revenues of US$253 million and Adjusted EBITDA of US$164 million.

The Transaction also includes a call option for Global Ports to acquire 50% of the Illichevsk Container Terminal (CTI) for the strike price of US$60 million from NCC Group's current shareholders. The term of the call option is three years following the closing of the Transaction. CTI, which is located on the Black Sea, has a market share of the Ukrainian container handling market of approximately 30%.

The Transaction has been approved by the Board of Directors of Global Ports. In connection with such approval, Deutsche Bank provided an opinion addressed to the Board of Directors of Global Ports as to whether the consideration to be paid by Global Ports pursuant to the Transaction is fair, from a financial point of view, to Global Ports.

The cash element of the Transaction will be financed through bank financing.

Source: Global Ports