Dutch interest in Thessaloniki Port Authority

LeonidsPort set to acquire 21% stake in OLT

Summary

Acquirer Advisors: Alpha Bank (financial), Machas & Partners (legal)

Total Consideration: €27/share or €57.1 mil. for 2.116 mil. shares (26% premium)

On January 10th LeonidsPort B.V. launched a public bid for 21% of the Share Capital of Thessaloniki Port Authority. The Dutch company will be buying 2.1 mil. shares either through the stock market or privately. The consideration offered is €27/share, which represents a c.26% premium over the 6 month average price of the stock and a c.13% premium over the closing price of Friday of €23.9.

The acquisition in numbers

(per share data)	FY23	Multiple
Revenue	8.5	3.2x
EBITDA	3.4	8.0x
Net Income	2.0	13.7x

The offered price of €27/share equates to a 8x EBITDA multiple which is significantly higher than the industry average of 6.1x. It should be noted that the consideration offered by the Dutch acquirer will be the final offer with no room for upward revision. We believe that Leonids is willing to pay a higher consideration mainly due to the growth prospects of the Greek economy and the strong market position of the company.

The Target

Thessaloniki Port Authority offers transportation services in Greece through its five main operating segments: i) Container Terminal, ii) Conventional Cargo, iii) Passenger Traffic, iv) Exploitation of Sites, and v) Intermodal. The port of Thessaloniki is the 2nd largest in Greece behind the Port of Piraeus as it handled c.16.7 mil. tonnes of cargo in 2023. OLT has experienced slow top line growth as its FY23 revenue increased by less than 1% compared to FY22. It’s EBITDA growth was higher at 3.6% over the same period, while net income rose by 2.6% on Y.o.Y basis. The company has experienced a marginal improvement in its margins as its gross margin improved from a 43.1% in FY22 to 43.8% in FY23, while its operating margin increased by just 40bps to 30.8%. On the solvency front, the company currently has no debt except for lease liabilities and its interest coverage ratio (calculated using gross financial expenses) is 12x.

Margin Analysis	FY22	FY23
Gross Margin	43.1%	43.8%
EBITDA Margin	38.6%	39.7%
Operating Margin	30.4%	30.8%
Net Margin	22.9%	23.3%

The Acquirer

LeonidsPort B.V. is a Dutch company that was recently founded by the Louis-Dreyfus family and is looking to invest in global infrastructure with a focus on European projects. The acquisition of a minority stake in OLT will be the family’s first investment through the new firm which signals optimism in the Greek economy and its infrastructure sector.

Outlook

By investing in a Greek port services company the Louis-Dreyfus family gains exposure to the growing economy of a country with a key position in the Mediterranean. Maritime & Shipping is one of the country’s largest industries and both its large fleet of vessels and key geographic position will ensure its dominance in the foreseeable future. These tailwinds make OLT an attractive investment and it remains to be seen if the Dutch company will increase its ownership share in the future.