The proposed commitment will give the PE firm a 40 per cent stake in the logistics company, CVC Capital Partners managing director Brice Cu confirmed in a virtual conference Tuesday. “And what’s interesting to know is that, it’s all primary capital. So all that money will be used for growing the business,” Cu said.
Fast is the third investment of CVC Capital Partners in the Philippines. In 2013, the PE firm acquired Manila-based business process outsourcing firm SPi Holdings through its Asia Outsourcing Gamma Limited. It sold the company in 2017 for $300 million.
Its first investment in the Philippines was in 2011 when it invested $119 million for a 15-per cent stake in Rizal Commercial Banking Corporation.
CVC’s investment in Fast, which will be made through CVC Capital Partners Asia IV, will help the Philippine firm accelerate its operational development through digitalisation and expansion of its e-commerce operations.
Fast, which was founded by the Chiongbian Family in the 1970s, also seeks to increase its regional footprint through M&As, according to the announcement.
“The investment in Fast by CVC is a testament to the attractiveness and potential of the Philippine logistics sector, the market-leading business we have built over the last four decades, and of course the economy more broadly,” William Chiongbian, Group President and CEO of Fast Group, said.
Fast has a workforce of more than 11,000 spread across 53 branches nationwide. It also boasts of over a million square meters in warehouse footprint and a distribution network of close to 90,000 stores.
The group is present in transport logistics, warehouse management, selling distribution, toll manufacturing, and value-adding supply chain services.
Its clients include big multinational and local conglomerates such as Nestlé, Johnson & Johnson, Colgate-Palmolive, Procter & Gamble, and NutriAsia, among others, as well as big pharmaceutical and healthcare companies like Zuellig and Green Cross.
CVC Capital Partners closed its fifth Asia Pacific fund at its hard cap of $4.5 billion in April. To date, CVC has raised $15 billion of commitments across its Asia Pacific funds, which in total have completed over 65 investments.
The Philippines may be a small market for PE investing but there has been a noticeable increase in the interest of global and regional buyout funds in this market, even as the number of opportunities is limited.
Aside from CVC, other global funds such as KKR, Blackstone, and Warburg Pincus have announced investments in the Philippines. In addition to having a young, dynamic population and high-growth across key sectors, the country is also home to a number of fast-growing companies that are seeking opportunities to consolidate existing business lines or expand into new sectors, verticals, and markets.