Posted April 9, 2020
New York-based shipping and logistics company Sino-Global Shipping America has decided to acquire a majority stake in Mandarine Ocean (MO), a Shanghai-based shipping company registered in the Marshall Islands.
As informed, Sino-Global signed a share purchase agreement with Kelin Wu, the 88.5 per cent shareholder of MO.
Under the deal, Sino-Global will acquire a 75 per cent shareholding in Mandarine Ocean for up to $3.75 million, with a combination of cash and stock dependent on MO’s financial performance.
Over the past three years, MO has an average annual revenue of approximately $38 million. With the integration of MO’s business, there will be a significant increase in Sino’s revenue beginning in the current fiscal 2020 fourth quarter and into fiscal 2021, according to Sino-Global.
Founded in 2013, MO is a shipping company providing worldwide ocean freight service. Mandarine Ocean currently has long-term contracts to operate fourteen bulk carriers with a deadweight of 20,000 to 50,000 dwt.
MO’s current downstream business operates in the middle portion of the ocean logistic supply chain, which includes shipping agency services, ship management and crew management. These services are all outsourced to other suppliers, each of these are within Sino-Global’s business scope.
With the completion of the acquisition, MO can utilize its relationship with Sino-Global to consolidate these services at a lower overall cost and provides enhanced profit potential. Ultimately, the company believes it will increase incremental shipping agency revenues by approximately $7 million based on historical volumes.
“This is a milestone agreement for our company, which allows our business to expand when we have begun to see an increased level of economic activity now that challenges and delays created by the coronavirus have begun to wane in China,” Lei Cao, Chief Executive Officer of Sino-Global, commented.
“Trucking operations have resumed in China, which is leading to increased export cargo arriving at ports and ships are needed to handle the backlog of containers. We see this as an opportunity for Sino-Global and Mandarine Ocean to create a ‘win-win’ scenario where we can utilize our relationships and expertise to grow their operations at an accelerated rate.”