Singapore Post Limited (SingPost) has initiated the sale of its US e-commerce outfits, Jagged Peak and TradeGlobal, it announced in a statement. However, it did not disclose details pertaining to the valuation.
The divestment move follows a strategic review of SingPost’s US-based e-commerce businesses.
In a press release, SingPost Group CEO Paul Coutts said: “Arising from the strategic review, we will step up our investment to better serve our home market in Singapore, as well as leverage our competitive advantages in Asia-Pacific.”
CGS-CIMB, a local brokerage covering the stock, estimated that the US businesses have a carrying value of around S$90 million ($66.4 million) to S$100 million ($73.8 million). The combined purchase price for the two US e-commerce units (Jagged Peak and TradeGlobal) was $184.4 million (S$249.6 million) in October 2015.
SingPost’s e-commerce units have reported operating losses which have worsened as a result of intense competitive pressures in the US and increasing bankruptcies in the country.
The national postal operator reported dismal results for its e-commerce segment in its latest 3QFY2019 earnings ending December 31, 2018, where the beleaguered unit saw operating losses widen at minus S$33.9 million compared to minus S$12.8 million achieved during the same period last year.
DEALSTREETASIA takes a deeper look at SingPost’s acquisitions aimed to transform the national postal operator to a global e-commerce logistics platform to the proposed sale of the businesses it bought in 2015.