Nasdaq-listed Sino-Global Shipping America has struck a deal to move into the bulker arena after giving up on tankers five years ago.
It has agreed to buy 75% of Mandarine Ocean from Chinese shipowner Kelin Wu, who owns 88.5%.
It will pay up to $3.75m, through a combination of cash and stock.
The final price is dependent on the takeover target's financial performance over the next two to three years.
Over the past three years, Shanghai-based Mandarine has had an average annual revenue of $38m.
Mandarine Ocean was founded in 2013 and has long-term contracts to operate 14 bulk carriers, six of which are owned by Wu.
The majority are handysizes and handymaxes, and range between 20,000 dwt and 50,000 dwt in capacity.
Mandarine Ocean also focuses on shipping agency services, ship management and crew management.
Revenue to be boosted
"These services are all outsourced to other suppliers; each of these are within Sino-Global's business scope," Sino-Global said.
The idea is to consolidate these services at a lower overall cost and provide enhanced profit potential.
"Ultimately, the company believes it will increase incremental shipping agency revenues by approximately $7m based on historical volumes," it added.
Sino-Global chief executive Lei Cao said: "This is a milestone agreement for our company, which allows our business to expand when we have begun to see an increased level of economic activity now that challenges and delays created by the coronavirus have begun to wane in China."
Trucking operations have resumed in China, which is leading to increased export cargo arriving at ports and ships are needed to handle the backlog of containers, he added.
He added: "We see this as an opportunity for Sino-Global and Mandarine Ocean to create a 'win-win' scenario where we can utilise our relationships and expertise to grow their operations at an accelerated rate."
Founded in the US in 2001, Sino-Global has interests in shipping, chartering, logistics and related services.
Deal with Cosco
The New York company also has offices in Los Angeles, Mainland China, Australia, Canada and Hong Kong.
In 2017, it took its relationship with Cosco a step forward with a new “strategic cooperation agreement”.
It inked a deal with Cosco’s Ningbo Xinyang Shipping that saw it arrange inland transportation for the Chinese giant’s container shipments into US ports.
Two years previously it terminated a deal to acquire a modern tanker from a Hong Kong owner.
Rong Yao International Shipping of Hong Kong was due to paid $10.5m for the 13,900-dwt Rong Zhou (built 2010).
In September 2014, Sino-Global took over Hong Kong-based Longhe Ship Management (LSM) in a deal to broaden its interests.
