Singapore’s SATS buying Worldwide Flight Services for $1.1B

 SATS Food Services restock a Singapore Airlines plane at Changi Airport in Singapore October 24, 2020. REUTERS/Edgar Su/File photo

Singapore-based ground handling services firm SATS Ltd is acquiring Paris-based Worldwide Flight Services (WFS) for 1.19 billion euros ($1.14 billion) cash, to create the world’s biggest global air cargo handler, the companies said.

“This is a transformational opportunity for SATS and our proposed acquisition of WFS will create a global leader…,” Kerry Mok, SATS’ CEO, said in a statement on Wednesday.

SATS is buying WFS from an affiliate of U.S. private equity firm Cerberus Capital Management.

The deal will be the biggest acquisition by SATS, which has a market value of S$4.35 billion ($3 billion) and counts state investor Temasek Holdings as its single biggest shareholder, according to Refinitiv data.

Last week, Bloomberg News reported SATS had sounded out financing for a potential deal which could be worth about $3 billion.

SATS had told the Singapore bourse that it was in talks to buy WFS but said the Bloomberg report contained “materially inaccurate facts”.

Trading in shares of SATS were halted earlier on Wednesday.

SATS said the purchase would be “immediately financially accretive” on a proforma basis and raise SATS’ earnings per share by 78 percent to 3.2 Singapore cents from 1.8 cents reported for the year to March, and increase revenue by more than 200 percent.

WFS reported 1.722 billion euros in revenue and earnings before interest, taxes, depreciation, and amortization of 232 million euros for the year ended March 2022.

Founded in 1984, WFS is the world’s largest air cargo logistics provider and a leading provider of ground handling and technical services. It has more than 300 customers and employs 32,300 staff, the company said.

($1 = 1.0458 euros)

($1 = 1.4468 Singapore dollars)