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Kuwait-based logistics company Agility will inject capital and resources into its recent acquisition, UK-based Menzies, to make it “bigger and better” than Global Integrated Logistics (GIL), which it sold last year.
Agility closed its acquisition of Menzies, which was formerly listed on London Stock Exchange (LSE), earlier this month.
Menzies, which is headquartered in Edinburgh, Scotland, is being merged with Agility’s National Aviation Services (NAS) and now forms part of Agility’s “controlled businesses” portfolio, group CFO Ehab Aziz told the company’s Q2 earnings call.
He said the company’s objective in buying Menzies was to accelerate the scale and the scope of its controlled business segment, and to inject the required capital and the required resources to take Menzies to the next level, building it “bigger and better” than Global Integrated Logistics (GIL), which it sold last year.
Aziz said that Menzies is number one globally in terms of markets served, number two for number of airports and number three for revenue.
“Our goal is to create value from Menzies through injecting capital and provide the capital required to grow Menzies and to basically capitalize on the fragmented nature of this space,” he said.
“This space is very, fragmented and there is huge room to grow. And we intend to focus on that segment in the next three to five years to become the dominant player in that space.”
He added: “Maybe there will be some noise in Q3 and Q4 because of the effect of the half year consolidation of the numbers in those two quarters. But hopefully from 2023, you will see a full year effect and a significant improvement in our operating results from the controlled segments.”
Agility acquired Menzies earlier this month for £571 million (AED 2.48 billion) for its equity and about GBP 760 million in terms of the enterprise value.
(Reporting by Imogen Lillywhite; editing by Seban Scaria)
