Deutsche Lufthansa AG has signed an agreement with Penauille Polyservices S.A. regarding the sale of Lufthansa`s ground handling subsidiary GlobeGround GmbH. According to the agreement, Penauille Polyservices will initially acquire 51% of the shares in GlobeGround. The remaining shares will be transferred to Penauille Polyservices on 30 June 2002. The transaction values GlobeGround at € 370 million on a cash and debt free basis and is subject to approval of the Lufthansa Supervisory Board and the respective cartel offices.
By combining GlobeGround with Penauille Polyservices` ground handling business Servisair, the transaction creates the world`s leading ground handling provider, operating at 199 airports in 39 countries on 4 continents and employing a workforce of more than 30,000 people. With GlobeGround and Servisair the transaction brings together two global brands that are known for premium quality services to their international airline clientele.
Penauille Polyservices` acquisition of GlobeGround allows for substantial revenue synergies from global branding and key account management as well as cost synergies gained from the enlarged operations. For the shareholders of Penauille, the transaction will be earnings accretive before goodwill amortization.
A combination of strong aviation market growth combined with ongoing liberalisation and outsourcing in ground handling services provide exciting future opportunities for GlobeGround and Servisair.
Traditionally, the ground handling industry has been dominated by monopolies and small, local, independent operators. Over the last years, a handful of true global third-party providers has emerged, however it is expected that industry consolidation will continue. The new market leader emerging from the combination of GlobeGround and Servisair intends to further actively participate in the industry consolidation.
Lufthansa is committed to remain an active shareholder in GlobeGround until June 2002 in order to ensure a smooth transition in ownership. Lufthansa sees Penauille Polyservices as an important global partner for the future and looks forward to a continuing good relationship with GlobeGround and Servisair.
It is the objective of Penauille Polyservices to capture the growth synergies of this leading alliance and thus to rely on the existing management and staff of Globe Ground and Servisair. Penauille and Lufthansa expect this alliance to create numerous new job opportunities in the future. Lufthansa has ensured that the GlobeGround staff following this transaction will keep its fringe benefits. Mr. Bluth, currently CEO of GlobeGround will become CEO of the enlarged ground services business while Mr. Willis, currently CEO of Servisair will become Chairman.
GlobeGround GmbH is an international ground-handling provider indirectly wholly owned by Deutsche Lufthansa AG. The company, based in Frankfurt, Germany, serves more than 550 airlines through its global network of local ground-handling operators at 112 airports in 32 countries. GlobeGround provides ramp services such as loading/ unloading, cleaning, fuelling and de-icing of aircraft and passenger services such as ticketing, check-in and lounge services as well as cargo handling services, including customs services, cargo documentation and warehousing. GlobeGround achieved in 2000 consolidated sales of € 391 million and an EBITDA margin of 9%. In the first quarter 2001, sales and EBITDA grew by 40% and 23%, respectively.
GlobeGround was founded in 1990 to provide Lufthansa with an instrument to realise cost advantages in the world-wide ground handling market. As a consequence of well-progressed liberalisation in the relevant markets, the continued consolidation within the ground handling industry will require extensive investments in the future. Lufthansa has therefore decided to withdraw from its strategic investment in the field of international ground services. Lufthansa will continue to be the majority shareholder in GlobeGround Deutschland, the operating entity for the German home market. This divestment marks an important milestone in the Lufthansa Group Strategy, which is aimed at the long-term creation of shareholder value. It serves to concentrate the management attention on the core business while strengthening GlobeGround`s market position through a combination with Penauille Polyservices.
Penauille Polyservices S.A. is a quoted company that provides industrial services such as facilities management, cleaning and security services, mainly in France. Penauille Polyservices became a major global ground handling provider in 1999 through the acquisition of Servisair. Penauille Polyservices achieved revenues of € 923 million in 2000 and its market capitalisation exceeds € 1 billion. Following this transaction, the combined turnover on a full years basis will exceed € 1.5 billion in 2001, the group will employ a total workforce of 63,000.
Lufthansa has been advised in this transaction by Merrill Lynch and Penauille Polyservices has been advised by Deutsche Bank AG.