Why SingPost is selling US e-commerce units Jagged Peak, TradeGlobal

The SingPost sign at a post office in Singapore November 2, 2015. REUTERS/Thomas White

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.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.