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Supreme looking at EMS Seven Seas' crown jewel

The ship supply market could be split in two if Supreme's acquisition of EMS Seven Seas is completed: A civil and a military part. Wrist Ship Supply is part of the game.

Photo: Wrist Ship Supply

Numerous factors indicate that EMS Seven Seas' well-functioning branch in Dubai, in particular, is what has made the American logistics company Supreme Group interested in acquiring a majority stake in the Norwegian company.

If there is one part of EMS Seven Seas that Supreme Group is intimately familiar with, it is the company's crown jewel in Dubai, as the two companies, out of Dubai, handled a significant part of the US Army's logistics in the wars in Iraq and Afghanistan during the last ten years. One could even say that while EMS Seven Seas preparied the lunch bags, Supreme Group delivered the bags in the field.

Looking to acquire 82 percent

As such, several sources ShippingWatch has spoken to estimate that it makes sense for the Americans to acquire the complete chain - from when the field rations are packed to when they are handed over to the military units.

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EMS Seven Seas recently announced that the share issue planned for around May 22, for a total USD 36.7 million, had been postponed to "around September 23 this year, at the earliest."

"This happens as the US logistics group Supreme Group BV per May 19 has agreed to purchase all shares and bonds of the five biggest shareholders in EMS Seven Seas, a move that makes Supreme Group BV the largest shareholder in the company by far, with a total of 82.1 percent of the shares," as the company said.

Fight for the top spot

It came as a surprise to many players in the market that EMS Seven Seas - just as the company was preparing to issue shares - looks set to be acquired by the more than 50 years old logistics group, which is registered in the Netherlands though its ownership is American. But it was likely not a huge surprise, in and of itself, that the Norwegian company, which has been struggling with poor results, could end up with new owners.

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EMS Seven Seas has in recent years been dueling with Wrist Ship Supply for the top spot as the world's biggest supplier of food and other amenities for shipping and offshore, though Wrist has held the top spot this past year. Wrist Ship Supply follows an aggressive growth plan that has led to several acquisitions:

"Acquisitions and takeovers form one of the top three goals for the company," as Wrist Ship Supply CEO Robert Kledal has told ShippingWatch.

Consolidation on the way

Many industry players have long estimated that consolidation is on the way, a development that would especially impact the major companies in the industry - these could include Japanese Fuji Marine in addition to EMS Seven Seas and Wrist Ship supply - and this consolidation could easily be realized if Supreme Group acquires EMS Seven Seas, they say.

A solid guess would be that the Americans are interested in the military part of the business, and that they are going to take the Dubai branch for themselves. This leaves the around 20 agencies in the civil business, and it is more unlikely that Supreme Group holds long-term ambitions for these units.

Wrist Ship Supply could benefit a lot from the rationalization, thus helping to expedite the consolidation that the market has been working to achieve for a long time now. So the stage has definitely been set for a game centered around speculations about Supreme's plans - a game where financially strong Wrist Ship Supply also plays a part and is likely to make a move if EMS Seven Seas' civilian business is put up for sale.

Supreme Group to acquire EMS Seven Seas

EMS Seven Seas reduces deficit

Wrist Ship Supply grows profits by 25 percent

EMS Seven Seas CEO resigns 

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