Atlas Development targets acquisitions by year end

UK logistics and engineering firm Atlas Development is set to close a series of acquisition deals in the region later this year as part of its expansion strategy.

The firm, which is listed on the Nairobi Securities Exchange (NSE) and London Stock Exchange (LSE), says it is in the advanced stages of discussions with potential takeover targets in Kenya, Tanzania and Ethiopia.

Atlas, which has made Kenya its African headquarters, revealed the impending deals while announcing a net loss of Sh548 million for the six months ended December.

“Complementary acquisition targets have been identified and we are in advanced discussions with a number of possible targets,” Ian Mann, the firm’s non-executive chairman said in a statement.

“All of the targets in question would provide us with sectorial and geographic diversification, additional visible revenue and would help build critical mass.”

Atlas services major upstream oil companies like Tullow and Africa Oil through provision of logistics, storage and medical facilities to staff working in remote drilling sites.

Other services it provides include fuel distribution, fleet maintenance, catering and laundry services and risk management.

Plummeting crude prices have, however, caused jitters among its clients as more exploration firms move from offshore to onshore activities to hedge against the prevailing circumstances. 

Atlas recently announced that it will, in partnership with the Geothermal Development Company (GDC), begin drilling geothermal wells locally.

READ: Atlas diversifies into geothermal wells drilling on low oil prices

Director for East Africa Nick Arnold on Tuesday declined to disclose the exact number of firms they were targeting as well as the acquisition budget.

“At this stage, I can neither disclose the number of businesses we are in talks with nor the specific countries where each is located,” Mr Arnold told Business Daily.

“We however expect that in the next four to six months, the company will announce at least one of several deals we are pursuing.” Atlas, which is listed on the NSE’s Growth and Enterprise Market Segment (GEMS), entered the country by buying a 49 per cent stake in Ardan Logistics Kenya.

The UK firm in October bought the remaining stake in the company and announced that it is eyeing oil and gas businesses in Djibouti in a bid to grow its revenue.

The buyout, which the firm says will be concluded by July, has gained the Atlas Sh291 million in revenue for the six months to December and a gross profit of Sh94 million, they announced on Tuesday.

It has changed its year-end from June to December in order to synchronise the reporting periods of the parent company with the associates.