PE-backed e-Shang Redwood gets $300m pre-IPO round
E-Shang Redwood (ESR), a pan-Asian logistics services company backed by Warburg Pincus, has received a $300 million pre-IPO investment from a consortium of Chinese investors.
According to a statement, the consortium includes GF Investments, Huarong International, Huarong Rongde, SPDB International, China Everbright, Everbright Securities and CMBC International. Details regarding ownership stakes and the timing of the IPO were not disclosed.
ESR was established in early 2016 through the merger of Singapore-based warehousing company Redwood Group Asia and Chinese counterpart e-Shang, which was founded in part by Warburg Pincus. Prior to the merger, the two companies had been invested by APG Asset Management, Dutch pension fund PGGM, Morgan Stanley, PAG and Goldman Sachs, which offered $120 million of pre-IPO funding to e-Shang in 2013.
More recent funding momentum includes a commitment by US-based investment firm and Redwood strategy partner Equity International to focus its first Asia fund on ESR projects. In July, ESR attracted a $300 million investment from Ping An Insurance Group that will be used to develop the company's Japan pipeline. The company claims more than 6.5 million square meters of logistics real estate projects across China, Japan and South Korea, with offices in Hong Kong and Singapore.
"We are very impressed by ESR's fast growth and strong execution capabilities, which has laid a solid foundation for the company's future," Elyn Xu, head of structured finance for GF Holdings (HK), said, "Modern warehousing will continue to benefit from the rapid development of e-commerce and the transformation of the retail sector in Asia and we believe ESR is well-positioned to further enhance its strong leadership position."
The need for supply chain modernization on the back of increasing online shopping activity has ramped up PE interest in the sector throughout developing Asia, with logistical gaps in China as well as Southeast Asia and India, expected to drive rapid medium-term growth. Warburg Pincus has been active in this space recently with participation in a $100 million round for Chinese courier Yunniao Distribution and a $125 million investment in India's Stellar Value Chain Solutions.
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