AD Ports merges Kezad Communities with developer Al Eskan Al Jamae

The share swap deal, with an enterprise value of $1.91bn, will create Abu Dhabi's largest staff accommodation company

Abdullah Al Hameli, chief executive of economic cities and free zones at AD Ports Group, says the merger of Kezad Communities and EAJ is in line with the UAE's goal of economic diversification. VictorShow more

AD Ports Group, the operator of industrial cities and free zones in Abu Dhabi, is to merge its Kezad Communities unit with property developer Al Eskan Al Jamae to create the emirate's largest integrated staff accommodation company.

AD Ports will retain a controlling stake in the merged entity and the transaction will be completed through an equity share swap with no cash exchange involved in the deal, the company said in a statement on Tuesday.

The combined entity will have an equity value of approximately Dh7 billion ($1.91 billion), positioning it to become a market leader in the UAE.

“Kezad Group continues to look for opportunities to leverage our assets and fully support the growth of priority industrial sectors,” Abdullah Al Hameli, chief executive of economic cities and free zones at AD Ports Group, said.

“This merger with EAJ significantly expands the number of staff accommodation assets under our control and extends the range of support services we can offer to our customers.”

AD Ports Group, which made its debut on the ADX in February after raising Dh4 billion from its share sale, has made several investments in recent months as it continues to expand its global footprint and streamline its portfolio of assets at home.

In November, AD Ports acquired Spain’s integrated logistics platform Noatum, as part of its global expansion in a Dh2.5 billion deal, its third this year.

In September, the company completed the acquisition of a 70 per cent equity stake in Egypt's International Associated Cargo Carrier for Dh514 million. The deal, which was announced in July, gives AD Ports majority stakes in IACC's portfolio of Egyptian maritime companies, Transmar International Shipping Company and Transcargo International.

Earlier this year, AD Ports also bought an 80 per cent stake in a Dubai-based global container shipping company Global Feeder Shipping for Dh2.9 billion, implying a 100 per cent enterprise value of Dh3.7 billion.

The latest move to merge Kezad Communities and EAJ is in line with AD Ports Group's strategy to boost its services in this “critical market” and the “wider national goal of economic diversification”, Mr Al Hameli said.

Kezad Communities is part of the Khalifa Economic Zones Abu Dhabi under AD Ports Group’s economic cities and free zones business. It was established in 2005 and was operated previously under ZonesCorp.

EAJ, an Abu Dhabi-based staff accommodation owner and operator, is a real estate development and management company that owns and operates 58,000-bed ICAD Residential City in Mussasfah.

Following the merger, Kezad Communities will be the largest staff accommodation company, with an owned and managed capacity of 135,000 beds.

In the first nine months of this year, revenue for Kezad Communities reached Dh275 million, while EAJ’s climbed to Dh205 million, AD Ports said.

Earnings before interest, taxes, depreciation and amortisation for the nine months to the end of September for Kezad Communities reached Dh168 million and Dh120 million for EAJ, it said.

Established in 2006, AD Ports Group owns and operates 10 ports in the UAE, including Khalifa Port, Zayed Port, Mussaffah Port, Fujairah Terminals, Community Ports and the Abu Dhabi Cruise Terminal, plus a terminal at Port Kamsar in Guinea, West Africa.

It also manages more than 550 square kilometres of industrial zones and an end-to-end logistics business, besides offering a range of maritime services.