AP Eagers sells AHG Refrigerated Logistics to Anchorage

Sydney private equity firm gains leading network for $100 million

AP Eagers sells AHG Refrigerated Logistics to Anchorage
Scott’s, along with Rand, Harris and JAT, are now owned by Anchorage


Private equity has a new chance to prove it can handle transport and logistics operations with AP Eagers selling AHG Refrigerated Logistics (AHG RL) to Anchorage Capital Partners (ACP).

Refrigerated Logistics comprises all of the transport and warehousing operations of Rand, Harris, Scott’s and JAT and the deal is worth $100 million.

"The sale of AHG Refrigerated Logistics is consistent with our strategy to focus on our core automotive retailing business," AP Eagers CEO and MD Martin Ward says.

"The transaction follows an extensive sale process to find a buyer for the Refrigerated Logistics business on the optimal price and terms.

"Anchorage is the ideal owner for the Refrigerated Logistics business and has indicated a commitment to continue to invest and grow the business.

"We believe that the business will have a positive future under its new owners."

The sale achieves AP Eagers’ objective post the acquisition of AHG to divest the Refrigerated Logistics division as soon as commercially possible at a reasonable price, the company notes.

"On completion, AP Eagers will receive cash proceeds of approximately $100 million, which will be utilised to repay all finance leases and hire purchase liabilities associated with Refrigerated Logistics, resulting in an expected reduction in net debt of approximately $95 million," it says, adding that the sum is "subject to adjustment for debt-like items and depending on the level of working capital and cash on completion and capital expenditure in the period prior to completion".

"AP Eagers recognised a non-cash impairment in relation to the AHG Refrigerated Logistics division at 31 December 2019 reflecting the value of the offer from Anchorage."

Read about how Anchorage Capital Partners solidified in the purchase picture, here

Completion of the transaction is expected in the first half of the year.

The vague timing may be due to completion being subject to a number of precedent conditions, "although notably it does not contain any regulatory conditions".

As part of the deal, AP Eagers has provided the usual warranties and indemnities and has agreed not to own or operate a business in the refrigerated logistics sector for a period of five years.

Meanwhile, business as usual on the road and warehouse floor is the division’s message.

"The management team expect a smooth transition of ownership, with no disruption to the existing business over the course of the transition," AHG RL says on its website.

Comment has been sought from Anchorage, mentioned in speculation last year around which firms were bidding.

It has been reported that the assets include 24 temperature-controlled facilities 1,800 trucks and 500 rail cars.

Interestingly, after a series of waste management and cleaning purchases, this will be the second in transport and logistics involving a rail component.

On January 6, Anchorage bought coal-focused rail leasing firm CF Asia Pacific (CFAP), the fourth largest owner of assets on the Defined Interstate Rail Network, for an undisclosed sum.

"The business has a dominant market position in the rail leasing market and a growing locomotive and wagon maintenance operation," Anchorage said at the time of the company that has 78 locomotives and 1,559 wagons.

"CFAP has been impacted by the drought in Australia as well as the slowdown in mining activity. 

"This presented ACP with an opportunity to leverage CFAP’s market position and high-quality asset base to increase utilisation as market conditions improve and significant committed infrastructure projects come online, including multi-modal terminals."

Anchorage, which manages three funds – the first operational in 2008 – with a total of $810 million in funds under management, was founded by MDs Phil Cave and Daniel Wong.


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