Singapore Post Limited (SingPost) has announced the successful sale of its Australia business, Freight Management Holdings Pty Ltd (FMH), to Pacific Equity Partners (PEP).
PEP will acquire the business enterprise at a value of A$1.02 billion which translates into A$775.9 million in cash and generates an expected gain on disposal of approximately S$312.1 million, subject to adjustment determined at the time of completion and other further adjustments.
FMH Group is comprised of three operating divisions – fourth-party logistics and warehousing, technology, and transport.
Companies that operate under the FMH banner include efm Logistics, FLIP, CouriersPlease, Border Express, BagTrans, Niche Logistics, GKR Transport, Formby Logistics and Spectrum Transport Systems.
PEP is an Australian based private markets fund manager and currently manages assets worth A$12 billion. Since 1998 it has made over 200 acquisitions and engaged in almost A$50 billion in transactions
“We are thrilled to welcome FMH Group to our portfolio,” PEP Managing Director David Brown says. “FMH Group has a stellar track record of growth, a passionate team and a clear and compelling trajectory.
“We look forward to supporting them to build on their success and facilitate further opportunities.
Singpost intends to use some of the proceedings brought in through the sale of Freight Management Holdings to repay borrowings, particularly its Australian dollar denominated debt amounting to A$362.1 million, which accounts for over half of the total Australian dollar denominated debt of the SingPost Group as of 30 September 2024.
“Once the transaction is complete, the board and management will review and reset the Group’s strategic plan, with a continued focus on shareholder value,” SingPost Group CEO Vincent Phang says.
Over the course of the strategic review SingPost says it received unsolicited interest in the acquisition of FMH, leading to an international competitive bid process.
“The board believes this divestment is the best option for shareholders by crystallising the unrealised value of the business and bringing forward unlocking value for the shareholders,” SingPost Chairman Simon Israel says.
SingPost provides postal and ecommerce logistics in the Asia Pacific region and serves customers in 220 global destinations and holds stakes in a portfolio of local and international postal and logistics companies.
The proposed sale is subject to standard regulatory approvals including from the Foreign Investment Review Board of Australia and requisite approvals from shareholders in an extraordinary general meeting of SingPost to be convened.
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