Korea outbound fund supports $377m China logistics deal
STIC Investments and Korea’s National Pension Service (NPS) have agreed to support a KRW455 billion ($377 million) acquisition of a majority stake in China-based Rokin Logistics by CJ Korea Express Corp.
CJ Korea Express, the country's largest logistics provider, will pay KRW311.9 billion for a 68% stake in the acquisition vehicle, CJKX Rokin Holdings, according to a regulatory filing. The balance will be held by the STIC CJ Global Investment Partnership fund, which is sponsored by NPS as part of efforts to help Korean corporations make acquisitions overseas. The fund's stake could ultimately increase to as much as 50%.
CJKX Rokin will in turn hold a 71.4% interest in Rokin. The Chinese company recorded sales of RKW191.2 billion for the most recent financial year, down from KRW315.1 billion for the 12 months prior to that. Net income fell to KRW7.7 billion from KRW14.2 billion over the same period.
According to AVCJ Research, Capital Today Group and GGV Capital invested RMB200 million ($31.4 million) for a 20% stake in the company in 2007.
CJ Korea Express has operations spanning contract logistics, freight forwarding, stevedoring, express delivery and shipping, with 71 facilities in 21 countries. The company has ambitions to become one of the top five global logistics players by 2020. Sales reached KRW4.6 trillion in 2014, up 20.2% year-on-year, while net profit came to KRW59.5 billion compared to a loss or KRW60.1 billion the previous year.
The STIC CJ Global Investment Partnership is part of the Corporate Partnership Fund (COPA Fund) launched by NPS in 2011. At least 17 vehicles - each one devoted to a single corporation - have been announced, with NPS said to have earmarked KRW6 trillion for the initiative. The corporates involved match the pension fund's commitment on a 1:1 basis.
PE firms take responsibility for the management of these vehicles. IMM Private Equity, EQ Partners and Mirae Asset Private Equity are among those involved in the program, in addition to STIC.
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