Sats said to be in talks to buy Worldwide Flight Services

Sats has sounded out financing for the potential buy, but deliberations are ongoing and details could change, sources said. PHOTO: ST FILE

SINGAPORE - Catering and gateway services provider Sats is in talks to acquire air cargo handler Worldwide Flight Services, the company confirmed Wednesday.

The Singapore-listed company has sounded out financing for the potential purchase, said the people, who asked not to be identified as the information is private. An announcement could come as soon as in the coming weeks should the parties reach an agreement, one of the people said.

Worldwide Flight Services is currently owned by private equity owner Cerberus Capital Management.

Sats refuted an earlier Bloomberg report citing the people as saying that the acquisition price could be around US$3 billion ($4.2billion). 

Deliberations are ongoing and details could still change. Representatives for Cerberus and Sats did not immediately respond to requests for comment.

Trading in Sats shares was halted late Wednesday afternoon after the Bloomberg News report, pending an announcement. The counter was up three cents or 0.7 per cent to $4.09 before the trading halt.

The 6.375 per cent bonds issued by Worldwide Flight Services via a vehicle jumped by a record 6.7 cent to 91 cents on the euro, according to CBBT pricing compiled by Bloomberg. The notes were the day’s biggest winners among European junk-rated bonds in early trading.

Founded in 1971, Paris-based Worldwide Flight Services is the world's largest air cargo handler operating in more than 160 major airports in over 20 countries, according to its website. The company also provides ground handling services as well as technical support to airlines. Its annual sales stood at  €1.3 billion (S$1.8 billion). Cerberus bought the French firm in 2018 for about  €1.2 billion from Platinum Equity.

Any deal will add to a wave of acquisitions betting on the rising demand for logistics services as global travel resumes. Singapore's PSA International last December agreed to acquire BDP International, a transportation company, from US buyout firm Greenbriar Equity Group.

In a business update for the first quarter ended June 30, 2022, Sats noted that it has been ramping operations and capacity to an anticipated increase in travel and cargo volume, which it expects to continue despite inflationary challenges.

Mr Kerry Mok, president and chief executive of Sats said the company is “focused on capitalising on growth opportunities to broaden our revenue streams”.

The company reported an operating loss of $34.3 million for the April-June quarter.
The last major acquisition made by Sats was in 2009, when it acquired Temasek’s stake in Singapore Food Industries for $334.5 million to expand its in-flight catering service. BLOOMBERG

• With additional information from The Straits Times

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