Aramex Receives Conditional Acquisition Offer from Q Logistics Holding
Aramex has announced that it has received a conditional offer from Q Logistics Holding to acquire up to 100% of its issued and paid ordinary shares, valuing each share at AED 3.00. This represents a 33% premium over the closing price on January 9, 2025, and a 35% premium over the weighted average price over the past month. The payment will be made entirely in cash. Aramex's board of directors has 30 days to review and respond to the offer.
Aramex's Financial Performance Justifies the Valuation
Aramex was valued at 9x EBITDA, which is justified given its strong financial performance in 2024. The company saw an 11% increase in revenue, reaching AED 6.32 billion, which led to a solid 10% improvement in net profit, amounting to AED 141.8 million.
Strong Growth in Local and International Volumes
Local market volumes grew by 11%, while international express volumes surged by 20%. The company's contract logistics business is operating near full capacity.
Shift in Business Mix in 2024
The main change in 2024 was a reduction in long-distance cross-border shipments, offset by an increase in shorter-distance and intraregional cross-border activities through international express products and trucking services.
Improved Profitability in Express and Contract Logistics
The gross profitability of express transportation and contract logistics increased by 8% last year. However, the freight forwarding business saw a 4% decline in gross profitability due to increased competition, pricing pressure, and cost inflation in the sector. This is one of the reasons that drove Q Logistics to seek to increase its scale.
Note: AED stands for United Arab Emirates Dirham, the official currency of the United Arab Emirates.
