Posted on: 1 March 2022
Braemar, a leading international shipbroker and provider of expert advice in shipping investment, chartering and risk management, is pleased to announce that it has completed the planned disposal of its Logistics Division, Cory Brothers (“Cory”) to Vertom Cory Holdings Ltd (the “Buyer”), for a total of between £10.25m and £15.5m spread over three earnout periods ending on 31 December 2024.
The all-cash consideration comprises initial cash proceeds of £6.5 million, together with three further payments based on the percentage of the gross profit of the newly formed Vertom-Cory business for that earnout period ending on 31 December 2024. The three earnout payments combined will be a minimum of £3.75 million and a maximum of £9 million.
The disposal is the last key element of the board’s new strategy of simplifying the Group’s operations in order to concentrate on a new growth strategy centred on Shipbroking. The board intends to use the consideration from the disposal to reduce net debt and strengthen the balance sheet in furtherance of this strategy.
Cory comprises a port and hub agency business and a liner and freight forwarding business. The business services UK ports, the port of Singapore, and ports in North America and the Netherlands and has joint arrangements with a number of worldwide agency partners. The buyer is a newly formed subsidiary of Vertom B.V. that has similar operations, mainly in northern Europe.
For the year to 28 February 2021, Cory generated revenue of £28.1 million and an underlying operating profit of £1.2 million. At the last reported balance sheet of 31 August 2021, Cory’s assets were held for sale on the Group balance sheet and comprised gross assets of £27.9 million and net assets of £4.1 million.
The disposal is being structured as the sale of 100% of the shares in three separate legal entities from within the Group, Cory Brothers Shipping Agency Limited, Cory Brothers (USA) Inc. and Cory Brothers Shipping Agencies (S) Pte Limited. The relevant Cory employees, including Cory Managing Director, Peter Wilson and Finance Director, David Noble, will leave the Braemar group to take up similar roles with the new Vertom-Cory business after the disposal.
James Gundy, CEO of Braemar said: “The disposal of Cory is the last key step in the execution of our stated strategy of refocusing Braemar on our shipbroking core and I am pleased that the buyers of Cory are a long-term strategic partner.
“We look forward to continuing to work with them under their new ownership and seeing the business thrive.”
Arjan de Jong of Vertom B.V. said: “After years of close co-operation we come to a new chapter with the acquisition of Cory. This acquisition enables us to create a strong European port agency and freight forwarding division under the name VertomCory. We are delighted and want to welcome Peter, David and their team to the Vertom family and are looking forward to let the business grow.”