Santova’s buy will open US market

Shipping and logistics firm Santova said on Wednesday it has finalised the acquisition of A-Link Freight for $2.3m in a deal that will strengthen its footprint and give it greater access to the lucrative logistics market in the US. Based in California, A-Link has agreements with big international carriers to provide air freight services daily from Los Angeles.

Shipping and logistics firm Santova said on Wednesday that it has finalised the acquisition of A-Link Freight for $2.3m in a deal that will strengthen its footprint and give it greater access to the lucrative logistics market in the US.

Based in Los Angeles, California, A-Link has agreements with big international carriers to provide air freight services daily from LA to the Far East and other big hubs across the globe as well as door-to-door services.

Santova, an international technology-based trade solutions specialist, uses its platforms to control and co-ordinate the cheaper movement of goods between customers without the company having to invest in and maintain fleets of vehicles or large warehouses.

Global supply chain disruptions have driven demand for Santova’s specialist services, as firms have realised that outsourcing their supply chain activities allows them to reduce risk and respond more quickly to changes in consumer behaviour.

The Durban-based JSE small cap said a big advantage of the acquisition is that A-Link is strategically located near Los Angeles International Airport (LAX). It was the fifth-busiest airport globally in 2021, having recorded 506,769 aircraft movements to service more than 48-million passengers and 3-million tonnes of freight.

A BIG ADVANTAGE OF THE ACQUISITION IS THAT A-LINK IS LOCATED NEAR LOS ANGELES INTERNATIONAL AIRPORT

“The US has been a focus area for Santova for numerous years with a number of existing clients importing from and exporting to the region,” the company said in a statement.

“LA hosts the US’s largest port complex, an extensive freight and passenger rail infrastructure, including light rail lines, and an extensive freeway and road system,” it added.

Having operated for more than 20 years, A-Link also offers warehousing near LAX, with many customers taking advantage of its cross-dock services. Cross-docking refers to minimising the handling of goods by moving them directly from an inbound to an outbound carrier, reducing the need for warehousing for long periods.

The group said the first instalment of $645,000 (R11.3m) was paid earlier this month while a second instalment of $705,000 is payable within 180 days and the third of $1m will be payable within two years.

With a market capitalisation of about R975m on the JSE, Santova is represented in 10 countries: SA, Mauritius, Germany, the Netherlands, UK, Australia, Hong Kong, Singapore, Thailand and Vietnam.

Santova’s share price slipped 2.74% to end at R7.10 on Wednesday but is still up more than 40% since the beginning of the year.