Two new investors are considering joining other bidders to buy South Korea’s Logen Logistics, reinvigorating the race for the country’s fifth-largest package delivery firm.
Shinsegae Group is mulling an acquisition of Baring Private Equity Asia (BPEA)-backed Logen Logistics, although it did not submit an offer in the first round of bidding in January, sources close to the matter said on March 13. It is said that the retail conglomerate is considering bidding for the logistics company, with its online grocery shopping platform SSG.com as an acquisition entity.
Seoul-based PE firm JC Partners also expressed interest in buying Logen Logistics in mid-February, a month after the first round of bidding where four to five bidders participated. JC Partners has reportedly begun due diligence to make its final decision on whether or not to submit a bid for the company.
The appearance of such new candidates is the result of a strategic decision by Citi Global Market Securities – which is acting as financial advisor to BPEA – to keep the door open for potential investors even after the first round of bidding closed. The move was an attempt to raise the odds of a successful sale by expanding the pool of bidders.
According to the bell’s league tables based on closed deals, Citi Global Market Securities advised on seven deals in 2019. Among them, it worked with the seller in six deals, including Lotte Group’s sale of its financial arms, the sale of Geo-Young, the sale of Medit and Hahn & Co.’s sale of Woongjin Foods.
In most of the transactions it worked on last year, Citi Global Market Securities chose a private negotiation with individual interested investors over a public auction, where the expertise and ability of the financial advisor serve as crucial elements of the success of the strategy.
Based on announced transactions, the firm also advised Anchor Equity Partners on the Health Balance deal, which some industry observers say does have a few things in common with the case of Logen Logistics.
In the summer of 2018, Anchor Equity Partners initially hired Goldman Sachs to run an auction for the health supplement company, but this attempt to sell the company failed. It made a second attempt in September of the following year with Citi Global Market Securities acting as financial advisor. Citi’s strategy to privately negotiate with each interested investor bore fruit three months later when the PE firm successfully exited the company after signing a deal with TPG.
Like the case of Health Balance, this is BPEA’s second attempt at exiting the logistics company, which would presumably make it more difficult to succeed and thus Citi Global Market Securities’ advising role is all the more important.
According to an annual survey on M&A financial advisors by the bell, Citi Global Market Securities was chosen to be the most preferable firm in terms of providing a creative deal structure, one of the seven criteria included in the survey. The firm also ranked second in the criteria of staff and track record as well as execution ability. (By reporter Han Hee-yeon)