Imperial to get R1.45 billion from shipping business sale
The sale is in line with its business strategy to focus on local “gateway to Africa” operations.
Imperial has completed the sale of its unprofitable (after tax) South American shipping business to São Paulo-based Hidrovias do Brasil in a deal that could possibly net it up to R1.45 billion. In a statement, Imperial said that it had closed the transaction on 16 April.
Hidrovias do Brasil is a Brazilian company dedicated to providing logistics services and naval, land and multimodal infrastructure. Created in 2010, the company, through its subsidiaries, offers transportation of merchandise, construction of ports, cargo terminals and shipyards, river and maritime navigation, cabotage and storage of merchandise, among others.
Ranked among the top 30 global logistics providers and listed on the JSE, Imperial is an African and European focused provider of integrated market access and logistics solutions with a significant African footprint and international expertise.
The transaction is subject to certain conditions including “an earn-out component” connected to water levels that the shipping business will operate in, over a four-year period (2021 to 2024). The contract, however, is not subject to any pending conditions or approvals from a regulatory perspective.
“The maximum aggregate purchase price, payable in cash, for the interest in the South American operations is approximately $100 million (R1.45 billion), which includes ‘locked box’ interest from 1 July 2020 until the closing date as well as the full earn-out payment,” said Imperial. Imperial’s departure from South America comes just seven years after it entered the region as part of a global expansion.
The sale also forms part of Imperial’s “One Imperial” business strategy which is aimed at serving as a gateway to Africa for its clients, principals and customers.