Tower Capital backs $204m Singapore logistics take-private
Tower Capital Asia is supporting a take-private bid for Poh Tiong Choon Logistics that values the Singapore-listed company at approximately S$275 million ($204 million).
A consortium comprising Tower and Choon An Poh, chairman and CEO of Poh Tiong Choon, is willing to buy all outstanding shares for S$1.30 apiece, according to a filing. This represents a slight discount to the September 19 closing price. Shares in the company closed down 1.89% at S$1.29 on September 21.
Investors representing 66.7% of Poh Tiong Choon’s shares have committed to support the offer, well above the 50% threshold required to pursue a full buyout. Choon An Poh holds a 24.27% stake in the business, which he will roll over into the acquisition vehicle. Tower Capital will contribute S$41.6 million in cash.
Founded in 1950, Poh Tiong Choon is one of Singapore’s leading homegrown third-party logistics providers, serving customers in industries such as chemicals, food, retail, infrastructure, and shipping. Its core businesses include transportation and bulk cargo handling, warehousing and related services, trading, leasing and property development, and terminal management.
The company recorded revenue of S$138.9 million in 2016, down from S$156.8 million the previous year. Over the same period, net profit dropped marginally to S$15.2 million.
“The company has a long history since its founding in 1950. The logistics industry is a high conviction investment theme of Tower Capital Asia and we believe in the potential of the company with private equity backing,” said Danny Koh, a partner at Tower Capital.
Before launching the private equity firm, Koh worked for 3i and Actis Capital. His team seeks mid-market buyout opportunities involving companies with enterprise valuations of up to $350 million, committing at least $50 million per transaction. Growth investments – for majority and minority stakes – are also considered, with equity checks in the $10-20 million range.
Last year, Tower Capital partnered Temasek Holdings in a S$269 million takeover of traditional Chinese medicine (TCM) operator Eu Yan Sang International. The deal was similar to Poh Tiong Choon in that the investors participated in a consortium that also included the company chairman.
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