ADNOC Logistics & Services to acquire Navig8 for $1 billion

ADNOC Logistics and Services (L&S), a global energy maritime logistics company, announced an agreement to acquire Navig8 TopCo Holdings Inc., an international shipping pool operator and commercial management company with an owned fleet of 32 modern tankers and a presence in 15 cities across five continents.

The agreement, which is subject to customary regulatory approvals, will accelerate the ADNOC L&S’s global expansion as it progresses towards its medium-term strategic growth investment target, just one year after its listing.

Financial and strategic highlights

Under the terms of the agreement, ADNOC L&S will acquire 80% of Navig8 for $1.04 billion with economic ownership transfer effective from January 1, 2024, and further acquire the remaining 20% ownership in 2027 for a deferred consideration of $335 million to $450 million.

The acquisition will be immediately value accretive, aligning with the ADNOC L&S transformational growth strategy and investment target. The first full year of investment is projected to boost earnings per share by at least 20% for ADNOC L&S shareholders. Moreover, Navig8 delivered over $400 million (AED1.5 billion) EBITDA in 2023, equivalent to 44% of ADNOC L&S’ EBITDA in the same period.

ADNOC L&S will unlock significant value through cost-saving synergies, with savings targets of over $100 million per annum already identified through optimizing technical management costs and bunker spend.

Navig8’s global footprint in 15 cities across five continents, and an owned fleet of 32 modern tankers, will greatly enhance ADNOC L&S’ international profile and expand its blue-chip customer base.

New capabilities and enhanced services

ADNOC L&S’ service offering will include pooling, commercial management, bunker trading, technical management, and ESG-focused digital solutions.

Abdulkareem Al Masabi, CEO of ADNOC L&S, said in a press statement, “This value accretive acquisition marks another major milestone as we deliver on our transformational growth strategy. The addition of Navig8’s presence in 15 international cities, fleet of tankers and world-class services will expand our geographical footprint and service offering, cementing our position as a leading global energy maritime logistics and services company.”

Following the successful completion of the acquisition, the current Navig8 management team will continue to operate the business on a day-to-day basis, while maintaining its current operations under the existing Navig8 brand, to ensure continued strength in business performance, while leveraging the complementary benefits of its partnership with ADNOC L&S.

When commenting on the acquisition, Nicolas Busch, CEO of Navig8, said, “This will allow us to enhance the service and value we deliver to both our customers and the Navig8 group. We are very proud to support ADNOC L&S as they increase their global footprint.”

Accelerated growth trajectory

Last year, at the time of its public listing, ADNOC L&S committed to investing between $4 to $5 billion over the medium term. Following its strong Q1 2024 financial performance and earnings outlook guidance upgrade, driven by continuing growth in activities across all business segments, the Company revised its growth guidance upwards with the intention to invest more than $5 billion (AED18.4 billion) in energy-related maritime logistics over the medium term, to meet growing demand in the UAE and beyond.

The company experienced robust Q1 2024 financial results, reporting a 34% increase in net profit year-on-year, and an increase of 42% in revenues year-on-year. ADNOC L&S had a record-breaking IPO in 2023 that was 163 times oversubscribed, making it the most in-demand IPO worldwide at the time of listing, and the second largest IPO in the MENA region 2023. Since listing, ADNOC L&S’ share price has appreciated more than 100%. This is the latest in a series of successful M&A deals undertaken by the Company since its IPO.

“At the time of our public listing one year ago, we made a commitment to our shareholders and the market to accelerate our strategic investments over the medium term. We are progressing towards achieving our strategic growth investment target with major expansions of our fleet and global footprint. The acquisition of Navig8, combined with our recent shipbuilding activities, demonstrates that ADNOC L&S is delivering on our strategy to maximise shareholder value,” Al Masabi said.