Private equity firms KKR, Blackstone and Bain Capital have made informal approach for buying CWT Ltd, according to a Reuters report, in a deal that estimates the value Singapore’s largest logistics company at approximately S$1.6 billion ($1.2 billion).
PE firms interest in CWT comes as its controlling shareholder flagged a potential sale of the business. C&P Holdings Pte Ltd, which has a 32 per cent stake in CWT, is considering a strategic review of C&P’s business and assets, CWT said on Monday.
The last decade has seen the company expand by growing its logistics business globally and acquiring a metals trading unit established by Glencore founder Marc Rich in 2011. Citing an executive familiar with the deal, Reuters reported that “The logistics business has decent growth rates and that works nicely for sponsors. The logistics play is very active lately.”
In February, Japan Post Holdings agreed to buy Australian freight and logistics firm Toll Holdings for A$6.50 billion ($4.76 billion). In the same month, freight carrier Kintetsu World Express agreed to purchase Singapore’s APL Logistics for $1.2 billion.
These were valuations that exceeded market expectations. CWT could potentially fetch S$1.4 billion – S$1.6 billion, Maybank Kim Eng Research said in a report, with a current market value of S$1.26 billion.
According to Reuters, the PE firms have sounded out CWT’s shareholders but there has been no formal approach as of yet. Other potential for CWT are Japan Post and Nippon Express. CWT currently employs around 6000 people and reported record revenue and operating profit last year.
C&P, in which CWT chairman Loi Kai Meng has a significant holding, acquired shareholding control of the logistics firm in 2004. Thomson Reuters data indicates that CWT insiders, including the chairman and his family, maintain ownership of close to 65 percent of CWT.
CWT has publicly stated there is no assurance of a transaction, though Credit Suisse and DBS are assisting C&P’s shareholders with the review, and as such as positioned to assist in the underwriting of such a deal. Under Singapore’s rules, a bid for a 30 percent or greater stake in a publicly-listed firms will trigger a mandatory general offer for the entire firm.
According to a source the Reuters cited, “The assets are strategic and there is a lot of interest in the sale.”
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