KKR agrees $1.1b deal for Singapore's Goodpack

The private equity firm will pay S$2.50 per share for all outstanding shares in the company through a scheme of arrangement. This represents a 23.2% premium to Goodpack's closing price on March 18, the day before company announced it had been approached by parties in connection with a possible transaction.

Brambles, an Australian supply chain logistics provider, said at the time that it had it held preliminary discussions about buying the business but they did not progress. The Blackstone Group and The Carlyle Group have also been linked to the asset. Goodpack announced on May 20 that it was in discussions with KKR.

The proposal still requires approval from 75% of shareholders who vote on the deal. David Lam, Goodpack's executive chairman, who holds a 35% stake in the business, has pledged to vote in favor of the proposal.

"We look forward to partnering with David and his management team in realizing Goodpack's potential and accelerating its growth by leveraging KKR's extensive relationships in new verticals and unique value creation resources, such as KKR Capstone, which works very closely with our portfolio companies to drive operational improvements," said Ming Lu, head of KKR Southeast Asia, in a statement.

Goodpack was founded in 1980 and claims to have the world's largest fleet of IBCs, with 3.2 million units, spread across more than 5,000 delivery and collection points worldwide. These are multi-modal, returnable metal box systems, which are typically leased to customers in the rubber, chemicals, automotive and food processing industries.

IBCs are seen as an alternative to disposable packaging such as wooden pallets, paper cartons and single-use steel drums.

The company reported a net profit of $52.1 million for the year ended June 2013, up 10.3% year-on-year. Revenue rose 7.7% to $190.8 million. In the first half of 2014, net profit jumped 9.2% year-on-year to $26.9 million while revenue was up 8.7% at $103 million.

The investment will be made via KKR's second pan-Asian fund, which closed last year at $6 billion. It is the PE firm's largest deal in Singapore since the $2.66 billion carve-out of Agilent Technologies' semiconductor group in 2005, which was done in conjunction with Silver Lake, GIC Private and Temasek Holdings. The company, renamed Avago Technologies, subsequently listed on NASDAQ.

This is also KKR's first deal in Singapore since opening its office in the city in 2012, although the office has served as a staging point for other investments in Southeast Asia.

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• Topics
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