SingPost to raise stake in Australian logistics firm to 88% in $161m deal
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SingPost’s cash reserves amounted to $435.8 million as at Sept 30, 2022.
PHOTO: LIANHE ZAOBAO
Bernadette Toh
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SINGAPORE – Singapore Post is looking to acquire an additional 37 per cent stake in Freight Management Holdings (FMH), a fourth-party logistics service company incorporated in Victoria, Australia, for A$175.4 million (S$161 million) in cash.
This will bring SingPost’s total stake in FMH from 51 per cent currently to 88 per cent upon completion of the transaction.
SingPost said exercise periods for subsequent offers to buy granted to FMH vendors will be advanced, and evergreen call options will be granted for the remaining 12 per cent stake as a pathway to full ownership.
“The strategic acquisition of FMH is a key move in strengthening the SingPost group in the overseas logistics space,” said SingPost group chief executive Vincent Phang. “FMH has performed strongly since our initial investment and is a key growth driver in the group’s logistics business.”
Besides FMH, SingPost also owns CouriersPlease, a first- and last-mile delivery courier network covering 90 per cent of Australia’s population.
SingPost said its latest acquisition gives it access to FMH’s digitally enabled logistics capabilities and, with its last-mile delivery network in CouriersPlease, allows it to offer technology-led, integrated business-to-business and business-to-consumer logistics solutions in the Australian market.
“This would play a key role in us being a logistics player of choice in the Asia-Pacific,” Mr Phang said.
SingPost first acquired a 28 per cent interest in FMH in December 2020. It raised its shareholdings to 51 per cent in November 2021, with a pathway to raise its shareholdings subsequently.
SingPost said on Wednesday that the consideration for its latest acquisition deal will be paid out in two tranches, both of which will be funded by the group’s cash reserves and available bank loan facilities. The group’s cash reserves amounted to $435.8 million as at Sept 30, 2022.
Subject to relevant statutory approvals, the group expects its further acquisition of interest in FMH to be completed by early 2023.
Shares of SingPost were up 1.92 per cent to close at 53 cents on Thursday. THE BUSINESS TIMES
