CJ Logistics has selected China-based private equity (PE) firm FountainVest as the preferred bidder for its Chinese subsidiary CJ Rokin.

The PE firm was nominated by sale manager Morgan Stanley after reportedly offering around 1.2 trillion won ($1.1 billion), the highest price of all the bidders.

FountainVest and three Chinese strategic investors, including JD.com and SF Express, were earlier named as shortlisted bidders. CJ Logistics changed the sale process to a progressive deal after the final round and entered into negotiations privately.

The switch to a progressive deal brought more financial investors into the race, while strategic investors walked away from the deal due to the high tag price.

“FountainVest has become the winner of the big ticket deal as it offered the highest price at the last minute,” said an industry source, adding, “Strategic investors’ offered prices were much lower than that of FountainVest’s.”

Founded in 2007, FountainVest participated in Broncus Technologies’ Series D round of funding and 4Paradigm’s Series D round of funding. The PE firm is expected to use its blind-pool fund to finance the CJ Rokin acquisition.

The largest shareholder in CJ Rokin, formerly known as Rokin Logistics, is CJKX Rokin Holdings Limited, a special purpose vehicle (SPV) jointly set up by CJ Logistics and private equity firm STIC Investments in 2015 to acquire the business. The SPV owns about 73% of the Chinese firm, with 53% held by CJ Logistics.

The sale is seen as part of a restructuring process. CJ Rokin’s business areas partly overlap with those of CJ Speedex and CJ Smart Cargo, CJ Logistics’ other Chinese subsidiaries. CJ Speedex provides logistics solutions for electronic goods, and CJ Smart Cargo is involved in the transportation of plant and construction equipment. (Reporting by Byung-yoon Kim and Myung-kwan Lee)