SILK Logistics Holdings has inked a sale agreement with DP World Australia for the acquisition of all issued share capital of Silk.

The ASX-listed logistics company announced this morning (11 November) that it had entered a scheme implementation deed with DPWA.

Silk’s equity is valued at about $174.5 million.

“DP World Australia is excited about the opportunity to welcome Silk into our portfolio,” DP World CEO and managing director Asia Pacific Glen Hilton said.

“This acquisition aligns with our strategy to deliver complementary logistics solutions for a broad customer base across Oceania.

“Combining DP World Australia’s terminal operations with Silk’s value add services enhances our capability to deliver enhanced solutions for customers and to create sustainable value for all stakeholders.”

Silk CEO and managing director John Sood said the proposed transaction recognises the company’s investment in its national port-to-door service offering.

“Today is an important and exciting day in the history of Silk,” he said.

“With the benefit of DP World Australia’s infrastructure combined with Silk’s landside expertise, Silk will continue to focus on providing the highest quality services to its customers.

“We also see strong strategic and cultural alignment between Silk and DP World Australia, and we look forward to working together to achieve our shared goals.”

The scheme of arrangement is still subject to certain conditions, including the receipt of regulatory approvals from FIRB, ASIC and the ASX.

An independent expert would also need to conclude that the scheme is in the best interests of Silk shareholders.

About 46% of Silk’s ordinary shares are held or controlled by Tor Asia Credit Master Fund (18.7%), Karma Beverages (13.2%) and JAS Logistics Consulting (0.3%) and BBJJ Investments (13.3%).

Entities Karma Beverages and JAS Logistics Consulting are associated with Mr Sood, and BBJJ Investments with Brendan Boyd, Silk’s former MD and CEO (now non-executive director).

Silk said these shareholders have confirmed their intention to vote in favour of the scheme, in the absence of a superior proposal and subject to the independent expert’s conclusions.

Silk chair Terry Sinclair said the board believes DP World’s proposal represents “compelling value” for the company and an “attractive outcome” for Silk shareholders.

“The board unanimously recommends that Silk shareholders vote in favour of the scheme, subject to the conditions outlined in this [ASX] announcement.”

Under terms of the scheme of arrangement, shareholders would receive total cash consideration of $2.14 per share, less any dividends declared or paid before implementation of the scheme.

Finance media have reported Silk shares surging by more than 42% following this morning’s announcement.