Singapore Post Limited (SingPost), the Asia Pacific-based postal and eCommerce logistics provider, is to sell its Australian business, Freight Management Holdings (FMH) to private equity firm Pacific Equity Partners (PEP) for AUD775.9m ($505.4m).
PEP has agreed to acquire the business at an enterprise value of AUD1.02bn, and generates an expected gain on disposal of approximately SGD312.1m ($233.1m), subject to adjustments determined at the time of completion and any other further adjustments, according to a press statement.
News of the deal comes after SingPost announced last week that it was in exclusive discussions over the potential sale of FMH, having launched a strategic review of the portfolio in July 2023.
“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 shareholders,” said Simon Israel, Chairman, SingPost.
Pacific Equity Partners Managing Director, David Brown said, “We are thrilled to welcome FMH Group to our portfolio. 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 utilise some of the proceeds to repay borrowings, in particular, its Australian Dollar-denominated debt amounting to AUD362.1m — as at 30 September 2024 — undertaken for the financing of the acquisition of FMH.
The SingPost Board is also considering the payment of a special dividend after taking into account the repayment of its Australian dollar-denominated debt and evaluating future funding requirements.
