Australia's Anchorage secures cold chain logistics carve-out
Anchorage Capital Partners has agreed a A$100 million ($66 million) carve-out of the refrigerated logistics division of Automotive Holdings Group (AHG), an Australia and New Zealand-based car dealership business.
AHG merged with A.P. Eagers – a minority investor in the business since 2012 – last year to form Australia's largest automotive retailer. The combined entity accounted for 120.5 million new vehicle sales last year, or 11.2% of the national market. Several assets had to be divested in order to receive clearance from antitrust regulators.
AHG Refrigerated Logistics claims to be Australia's only truly national temperature-controlled supply chain network. Established in 1952 as Scott Refrigerated Freightways, the company achieved its current size and status through the gradual amalgamation of several independent players, including Scott's, Rand, Harris, and JAT. It operates a fleet of trucks and a network of warehousing facilities, serving grocery retailers, foodservice distributors, industrial manufacturers, and exporters.
Martin Ward, CEO of A.P. Eagers, said in a statement that the sale of AHG Refrigerated Logistics is "consistent with our strategy to focus on our core automotive retailing business." The unit is classified as a discontinued in operation in the company's latest annual accounts. It recorded a A$14.4 million net loss post-acquisition and A.P. Eagers recognized a A$34.3 million impairment loss.
A.P. Eagers generated A$5.8 billion in revenue for the 12 months ended December 2019, up 41.4% year-on-year. Largely as a result of impairment charges linked to the merger, EBITDA fell 54.7% to A$97.5 million, while the company moved from a net profit of A$97.5 million to a loss of A$80.5 million.
Anchorage is currently deploying its third fund, which closed A$350 million in 2017 and targets special situations and turnaround investments in Australia, New Zealand and Southeast Asia. The firm makes controlling investments in underperforming businesses with enterprise valuations of A$30-250 million. It takes a hands-on approach to deals, including the establishment of a turnaround committee at each portfolio company.
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