CDH exits Singapore equipment rental business

The Chinese private equity firm took a controlling stake in Aver Asia in 2015, its third investment in Southeast Asia. Aver Asia had no existing China operations or plans to expand into the country, but CDH saw an opportunity to leverage experience gained from other leasing investments in China and Indonesia. The goal was to support continued regional expansion.

Aver Asia was family-owned and had never previously accepted external equity investment. At the time, it had 2,000 customers across Southeast Asia and branch offices in Malaysia, Indonesia, and Myanmar. Operations now cover China, Thailand, and Cambodia as well. The company is positioned as a one-stop-shop for construction equipment, offering leasing and sales services as well as repairs, replacement parts, and training.

It has relationships with numerous global manufacturers, including generators and compressors from Airman, aerial platforms from Genie, winches from Hercules, and forklifts from Doosan.

“Due to infrastructure improvement and urbanization, construction demand is expected to grow in Southeast Asia. The amount of construction investment within the region is estimated to double over the next five years. Construction work has become increasingly mechanized as safety awareness has risen and economic development has brought about higher personnel costs, and an accelerating shift from ownership to rental of construction equipment is forecasted,” Sumitomo said in a statement.

The Japanese company generated JPY4.9 trillion ($44 billion) in revenue for 2019, of which 15% came from transportation and construction systems. It claims to have construction equipment distribution and leasing operations in 18 countries that generate $4 billion in annual revenue. Aver Asia will support expansion in Southeast Asia.

Aver Asia had 477 employees across 16 sites as of December 2019. Revenue for the year reached $90 million. In 2013, it was S$70-80 million ($52-60 million), with a projection of S$100 million for 2014.

CDH invested in the company out of its fifth US dollar-denominated fund, which closed at $2.55 billion in 2014. While the vehicle is primarily China-focused, there is scope for a limited amount of investment in Southeast Asia. Fund VI closed at $1.5 billion last year.

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• Topics
• Southeast Asia
• Exits
• Trade sale
• Industrials
• Support services
• Singapore
• China
• CDH Investments Management