- 18 March 2016
- Transport / Logistics Services
A national parcel delivery company in South Korea is the subject of a fierce bidding war between logistics companies around the world including DHL and UPS. Logen Co has been put up for sale by a Hong Kong private equity company Baring Private Equity Asia.
The first bid led by Baring PEA and its sale agent JP Morgan Chase & Co had multiple bidders including UPS, DHL as well as private equity funds such as KKR & Co, and CVC Capital Partners. The sale is for a 100% equity stake in Logen. Baring had bought the company for 158 billion won (£93 million) in 2013. The market estimates that Logen could now be worth 300bn won (£178,500,000) as a lower estimate.
With the booming e-commerce market in South Korea, an acquisition like this could be a very good buy for a company that seeks to exploit the extremely technologically savvy and mature S Korean market. DHL or UPS could make inroads into Asia with a foothold of this kind.
It is also attractive to private equity companies who see the logistics market as being a very good investment. Logen is also a very well run company with a loyal client base and good prospects for growth.
The company is focused on customer to customer deliveries and differs from B2B or B2C delivery businesses in that it connects very small businesses and customers. Last year it bought a 70% stake in KGB Logis Co for 25 billion won, making it S Korea’s fourth biggest with a market share of 10%. ket share of over 10 percent. Combined earnings before interest, taxes, and amortization of the Logen and KGB Logis are estimated at 40 billion won for this year, up from last year’s around 30 billion won.
JPMorgan is expected to select shortlisted candidates based on the bid price and finalise the sale within the first half.