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ESL Shipping acquires AtoB@C Shipping

Published by , Assistant Editor
Dry Bulk,

Leading carrier of dry bulk vessels in the Baltic region ESL Shipping Ltd – a company which is fully owned by Aspo Group – is to acquire all outstanding shares of AtoB@C Shipping AB and AtoB@C Holding AB (AtoB@C) that offer shipping services. The enterprise value is €30 million. The final purchase price will be mainly financed by Aspo's existing financing reserves, and approximately €4.2 million will be covered by new shares issued by Aspo Plc.

According to ESL, the transaction will require the competition authority's approval in Finland to be completed. It is estimated that the transaction will be completed in the third quarter of 2018. The Board of Directors of Aspo Plc will decide on the issue of new shares when the deal is completed based on the authorisation given to it by the Shareholders' Meeting deviating from the shareholders' pre-emptive right. The number of new shares to be issued will be determined five business days before the closing of the transaction on the basis of 25 days' volume weighted average trading price of Aspo shares on Nasdaq Helsinki Ltd. The shares have a restriction of two years on the right of disposal. 

AtoB@C is engaged in the shipping business with 30 vessels in size of 4000 - 5000 t. AtoB@C owns six dry cargo vessels in full, and it has a share of 49% of two vessels. The other 22 vessels are time-chartered. In 2017, AtoB@C posted net sales of €79.3 million and an operating profit of €3.2 million. The cargo AtoB@C carries mainly consists of raw materials and products of the forest industry, products of the steel industry, fertilizers, recyclable materials, biofuels and minerals. The head office of AtoB@C is in Ystad. 

With the transaction, the net sales of ESL are to increase from €80 million to approximately €160 million using the figures from 2017. In addition, the cargo volume carried will increase from approximately 11 - 12 million t to approximately 16 - 17 million t.

The transaction will further reinforce the position of ESL in the category for smaller vessels, and its business will strengthen considerably with new customers and new product flows. If the transaction is completed, ESL will have a total of 50 vessels including new ships with a deadweight capacity of 468 000 t compared to the previous 331 000 t. The company owns 19 vessels in full, it has a minority share in two vessels, one vessel is leased and 28 vessels are time-chartered.

"Aspo's strategy is to develop leading companies in its field. The acquisition will shift ESL Shipping to a new size class and put it in a good position to improve operational efficiency and overall profitability of the shipping company," explained CEO of Aspo Plc and Chairman of the Board of Directors of ESL Shipping, Aki Ojanen.

ESL Shipping and AtoB@C both currently have a strong presence in the whole Northern European region. The expanded ESL Shipping will be an even more balanced and more diversified shipping company in terms of risks. With the acquisition, ESL Shipping will have even more opportunities to develop environmentally-friendly and effective transport solutions to meet customers' future needs.

"Together we form a strong Nordic shipping company that is customer-driven. It has strong shoulders to build future success determinedly," added Managing Director of ESL, Mikki Koskinen.

The main owner of AtoB@C, Anders Nilsson commented: "I am very delighted to have found the best possible home for my shipping company. This is a good starting point."

The deal is anticipated to improve Aspo's earnings per share already during the present financial period. Targeted annual synergies amount to at least €2 million, and it is estimated that they will be met in full starting from 2020. 

Upon completion of the transaction, ESL will present its new structure and targets in more detail as part of Aspo Group.

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