Loscam owners consider selling company in $2 bln-plus deal, sources say

Sinotrans

27/05/2024 07:44

By Kane Wu and Scott Murdoch
       HONG KONG, May 27 (Reuters) - Owners of Asian pallet
pooling provider Loscam are considering a sale of the entire
company in a deal that could fetch over $2 billion, three people
with knowledge of the situation said.
    Loscam, which is jointly owned by China Merchants Group
 CMG , CITIC Capital and Fountainvest Partners, has approached a
number of potential buyers, including infrastructure funds to
discuss the sale, the people said.
    The discussions are at an early stage and the structure of
the deal is not finalised, the sources said.
    The owners are aiming to wrap up the sale by the end of the
year, said a fourth person with direct knowledge of the deal.
    Loscam hires out pallets and other returnable packaging
equipment for retailers and food, beverage and grocery
manufacturers in 12 Asia Pacific countries to transport goods.
        Its estimated earnings before interest, taxes,
depreciation, and amortization (EBITDA) are about $200 million,
said two of the sources.
    Loscam's valuation ask could exceed $2.5 billion based on a
multiple in the low teens over its EBITDA, one of them said.
    Sellers and buyers however may have different expectations
of the EBITDA multiple, the people said.
    The owners attempted to sell the Australia and New Zealand
businesses of Loscam in early 2022 but the sale did not proceed
as U.S. interest rates hikes distracted buyers, said the fourth
source.
    The owners would prefer to sell the entire company than
pieces of it in the current discussions, the sources said.
    Loscam, CMG and Hong Kong-listed Sinotrans  0598.HK , CMG's
subsidiary that holds its Loscam stake, did not immediately
respond to Reuters requests for comment. CITIC Capital and
Fountainvest declined to comment.
    Hong Kong-based conglomerate CMG acquired then
Australia-based Loscam in 2010 from private equity firm Affinity
Equity Partners for an undisclosed sum. 
    In 2018, CMG via its subsidiary Sinotrans sold a 55% stake
in Loscam to CITIC Capital and Fountainvest for about 2.5
billion yuan in total, Sinotrans said at the time.
    CITIC bought 33% in Loscam and Fountainvest 22%, the
disclosures at the time showed.
    One of Loscam's main rivals is CHEP, owned by Australian
firm Brambles  BXB.AX . Loscam bought CHEP's China business in
2022 for $132.2 million, including debt.
            

 (Reporting by Kane Wu in Hong Kong and Scott Murdoch in Sydney;
Editing by Sonali Paul)
 ((kane.wu@thomsonreuters.com; +85228436590; Reuters Messaging:
kane.wu.thomsonreuters.com@reuters.net))