Private equity firm KKR is set to launch the sale of Singapore-based Goodpack in a deal that could value the provider of shipping containers and logistics services at around $1.8 billion, people with knowledge of the matter said. The U.S.-based firm has hired Deutsche Bank, opened a new tab and Rippledot to advise on the sale, and a formal process will begin in the coming weeks, the people said, declining to be identified as the information was private. The sale would be the first in Asia from KKR’s latest $6 billion fund raised last year.
According to its website, Goodpack, founded in 1980, leases steel intermediate bulk containers (IBCs) on a trip and term rental basis to multinational corporations operating in the rubber, tire, food, and chemical industries. It operates the world’s largest fleet of IBCs and has a network of over 5,000 delivery and collection points.
The company also markets IBCs to companies that operate their distribution networks, providing them with IBCs to store and transport their products. It operates a facility to refurbish IBCs in Europe, the United States, and China.
KKR bought Goodpack in 2014 and expanded its logistics business. The company now provides global freight forwarding, warehousing, and cold chain management services and is the third-largest container manufacturer in Southeast Asia. Its diversified business has helped the company weather the impact of the COVID-19 pandemic, which slowed business activity and weighed on corporate valuations.
In a statement to the stock exchange, Goodpack said an affiliate of KKR was planning to acquire all of its shares. The offer will be made via a scheme of arrangement, and shareholders will be entitled to 2.50 Singapore dollars per share. That represents a premium of 44.7% to Goodpack’s 12-month volume-weighted average price as of 18 March.
As of the end of March, KKR held a 30.30% stake in the company. Among the top shareholders were Harris Associates L P, which held 26,657,000 shares, representing 3.10% of the company’s stock, and T. Rowe Price Investment Management, which held 26,473,000 shares, or 3.07%.
In a US$790 million five-year refinancing in late 2018, Goodpack’s loan was fully subscribed with half a dozen lenders joining in general syndication, and the Philippines’ BDO Unibank contributed a large ticket of around US$225m, which was its most significant commitment to any borrower outside its home market, according to Refinitiv data. The lender’s participation was a positive sign for the company, plagued by slowing business and a weak credit profile since its buyout in 2014. KKR’s plan to sell Goodpack may be timed to benefit from the growing interest in logistics assets. This year, the sector has been one of the few areas of strength in global capital markets. Global M&A in the logistics industry is up 48 percent this year compared to 2018. However, many investors are wary of the sector’s fragility and await concrete signs of stability before taking further positions.