FountainVest buys China logistics business

The PE firm will take a 73.1% in Rokin, according to a filing. Improving CJ Logistics’ financial structure was given as the reason for the sale. An auction process was launched towards the end of last year, with the likes of JD.com, SF Group and The Carlyle Group reportedly linked to the asset.

CJ Logistics, then known as CJ Korea Express, acquired Rokin in 2015 with support from STIC CJ Global Investment Partnership fund, a vehicle managed by STIC Investments and backed by Korea’s National Pension Service (NPS). The fund was part of an initiative to help Korean corporations make acquisitions overseas.

They paid KRW455 billion for the asset, with CJ Logistics contributing KRW311.9 billion for a 68% stake and the fund holding the balance. Rokin had previously received VC backing, with Capital Today China Group and GGV Capital investing RMB200 million ($31.4 million) for a 20% stake in 2007, AVCJ Research’s records show.

Officially established in 1997, Rokin is a third-party contract logistics company with core capabilities in cold chain, chemicals logistics and general cargo. It has 5,000 employees, 740,000 square meters of warehousing space, and access to more than 60,000 vehicles. The founding family and management team will retain their existing shareholdings once the transaction closes.

“Rokin enjoys competitive advantages especially in food cold chain, medical cold chain, and chemicals logistics industries. Rokin has built a nationwide network of warehouses and transportation coverage, providing high quality logistics services to multinational and top Chinese corporate customers. Despite the impact of the COVID-19 epidemic, Rokin continued to generate sustainable growth and profitability,” FountainVest said in a statement.

Rokin generated sales of KRW341.6 billion in the most recent financial year, up from KRW236.3 billion 12 months earlier. Over the same period, net income rose from KRW7.6 billion to KRW14.7 billion. In 2015, revenue and net income were KRW191.2 billion and KRW7.7 billion, respectively. CJ Logistics reported sales of KRW65.9 billion in 2019 from operations that span contract logistics, parcel delivery, freight forwarding, stevedoring and transportation, and project logistics.

FountainVest is currently raising its fourth China fund, which has a target of $2.8 billion and a hard cap of $3.2 billion. A first close of more than $1 billion came in the final quarter of 2020. Existing logistics industry exposure includes China Merchants Loscam, a pallet and packaging business acquired for RMB2.48 billion in 2018. CITIC Capital also took part in the deal.

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• Topics
• Greater China
• North Asia
• Buyouts
• Trade sale
• Support services
• China
• Logistics
• Fountainvest Partners
• STIC Investments