Agility, one of the leading global providers of integrated logistics solutions, yesterday signed an agreement to take over Oy Nystrom & Co based in Vantaa, Finland.
The acquisition positions Agility as a leading logistics provider in Northern Europe and marks an important milestone in the company's pan-European development.
The acquisition of Nystrom enables Agility to leverage the synergies of combined freight across the Nordics. Nystrom's customer base benefits from additional access to Agility's comprehensive global network and varied portfolio of services.
"The acquisition of Nystrom continues our expansion in the Nordics, where the focus is to build on the significant growth achieved in 2008. Agility continues to follow its long-term strategic goals independent of the economic difficulties the industry currently faces," said Chris Price, Managing Director for Agility's European Area North.
Nystrom will be rebranded to Agility and the company will continue to be managed by the existing CEO, Jan-Erik Skogster.
"No jobs are being cut as a result of the merger. Nystrom will continue to provide the same high level of personal service their customers have come to expect," said Price.
Nystrom, previously Agility's Air and Ocean agent in Finland, was established in 1932 and is focused on forwarding and logistics services with 35 employees and annual revenues of €15 million (Dh73m).
Price said Europe's Nordics – Sweden, Norway, Denmark and Finland – are of strategic importance to Agility because as specialised economies, they represent a disproportionately high amount of trade relative to their gross domestic product. A year ago, Agility in the Nordics consisted of a Swedish entity, with a minority stake in a joint venture in Denmark and agents in Norway and Finland.
"After successfully acquiring a hundred per cent shares of CF GeoLogistics A/S, Denmark, establishing offices in Oslo to facilitate overland transportation, and the latest acquisition of Nystrom in Finland, Agility has extended its coverage to provide a complete solution for Northern Europe with a solid platform for further expansion," Price added.
Agility aims to cut net debt to zero by year end
Kuwaiti logistics firm Agility wants to cut its net debt position to zero this year by boosting its cash position as access to credit becomes even harder, its chairman said.
Tarek Sultan also said in an interview that the Gulf's biggest logistics firm could exit from its investment, including Iraq's Korek Telecom, to focus on core operations after expanding rapidly in the past few years.
He said Agility has approximately $1.7 billion (Dh6.24bn) of debt and $1.3bn in cash – leaving around $400 million in net debt.
"We're very much focused on our core business and ensuring we have a strong liquidity position. We hope to bring the net debt level to zero by the end of 2009," Sultan said in Davos, Switzerland, ahead of the annual meeting of the World Economic Forum.
"You want to have as good a cash position as possible. Access to capital is pretty much constrained. Many banks are not lending. It's the question of willingness of banks to lend and that doesn't exist," he said.
Sultan confirmed Agility is close to meeting its 2008 revenue target of $7bn, adding that the firm expected 2009 revenues to be higher than that of last year's.
Agility has spent billions of dollars on acquisitions in the past few years, buying a string of logistics companies in Asia and other emerging markets to reduce its dependence on US government deals to feed troops in Iraq and Afghanistan.
Sultan said the pace of expansion could slow as it focuses on digesting the past purchases.
"There may be divestiture of non-core assets. Going forward, if we are going to do [acquisitions], we will be focusing on larger opportunities," he said.
Sultan also planned to scale down the company's private equity and real estate investment operations and exit from Iraqi-Kurdish operator Korek Telecom.
"Business prospects for private equity were completely based on access to financing," Sultan said. "It's not a viable business model. Exiting some of our investments would be good for our shareholders." (Reuters)