Bullish Expolanka to capture Central America with $ 9.7 m acquisition
- Makes second acquisition, bringing total to $ 12 m in 6 months
- Expo says latest acquisition is important strategic initiative with Central America gaining popularity as apparel manufacturing hub in relation to ”nearshoring” strategies adopted by leading US
Bullish Expolanka Holdings PLC is making further inroads to Central America with the acquisition of logistics specialists firm for $ 9.7 million (around Rs. 2 billion). The acquisition of IDEA Logistics LLC and its group of companies is via EFL Global Logistics Ltd. Singapore and EFL Global LLC, USA fully owned subsidiaries of Expolanka Holdings.
IDEA Logistics is a Central American logistics company headquartered in the US, servicing a range of US customers, offering freight forwarding, warehousing and trucking services.
«The acquisition is an important strategic initiative,» Expolanka said. It will enable Expo to expand its operations into Central American, which the company said is gaining popularity as an emerging and fast-growing apparel manufacturing hub in relation to “nearshoring” strategies adopted by leading US customers.
Central America consists of seven countries – Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and Panama.
The acquisition is the second within the past six months after Expolanka in March bought 100% of Seville Container Freight Station Inc. and related companies for $ 2.2 million. Seville is a bonded container freight station and a bonded trucking company located in the strategically important John F. Kennedy Airport in the US.
The Latin American entry further strengthens Expolanka’s presence which currently spans over 60 cities in 29 countries making it a truly Sri Lankan multinational in the global logistics industry. In February 2021 EFL also set up a presence in Canada, offering logistics services across the region. The scope of services include freight forwarding, warehousing and value-added solutions to effectively and efficiently transport all types of cargo. In April last year EFL expanded its footprint to the Scandinavian Region with the launch of its Denmark office.
“Having made a quantum leap to expand beyond our roots as a subcontinent-based freight operator, our rapid global expansion over the past three years has propelled EFL to the forefront of the global logistics arena. It is therefore with a deep sense of accomplishment that I acknowledge that EFL is now recognised among the upper echelons of the logistics industry in the world,” Expolanka Holdings Group Managing Director and CEO Hanif Yusoof told shareholders in the company’s Annual Report for FY21.
Aided by the gradual growth in base business along with meeting emergency customer demands together with elevated freight rates, Expo›s logistics sector boosted its revenue by 119% to an all-time high of Rs. 216.3 billion in FY21. The largest contribution came from the North America Trade Lane operation, which has continued to be the main catalyst of EFL’s growth trajectory.
A sizable share of business and profitability during the year was derived from the Far East origins, which is now operating on par with the traditionally strong subcontinent markets. Whilst the established markets such as China, Vietnam, Indonesia and Cambodia performed exceptionally well, new markets such as Malaysia and Taiwan, too, reported encouraging growth through FY21.
Despite the challenges seen in Europe, EFL’s new operations in Denmark and Belgium performed reasonably well during the year, making gains in terms of customer portfolio and strengthening EFL’s brand presence in Europe.
Bullish investor sentiment on Expo in recent weeks propelled it to be the most valued on the CSE, with market capitalisation of Rs. 291.7 billion. Last week Expo share rose by 48.5% to close at Rs. 149.25 whilst it hit a peak of Rs. 164.75.
In FY21 and FY22 1Q Expo became the most profitable listed entity, aided by COVID pandemic-related opportunities in the global logistics market. It ended FY21 with a hefty net profit of Rs. 14.8 billion as opposed to a loss of Rs. 438 million in FY20. Group revenue rose by 111% to Rs. 218.7 billion. In the first quarter of FY22, it saw a 259% YoY growth in Group Profit After Tax to Rs. 6.3 billion and a 165% YoY increase in Group revenue to Rs. 95.7 billion.