Affinity exits Loscam in PRC trade sale

CHAMP Private Equity and Pacific Equity Partners lost out against the group in earlier rounds of bidding.

China Merchants has acquired over 90% of Loscam, sources confirmed to AVCJ, and Affinity has completely exited its stake, which it originally acquired in 2005 from DB Capital Partners in a secondary transaction, paying some A$250 million ($220 million) for around 77% of the asset. The actual return has not been disclosed, but widely-credited reports suggest a final sale figure in the A$650-750 million ($548-632 million) range.

Dr. Fu Yuning, President of China Merchants Group, will become chairman of the board at the company, but the rest of the Loscam senior management team will remain in place and have taken up China Merchants’ offer to acquire equity in the new structure.

Rather than being acquired by China Merchants investee China International Marine Containers (CIMC), as initial reports suggested, Loscam is being taken into the $39 billion conglomerate as an autonomous business, sources said, marking China Merchants’ first move into the pallet pooling business. China Merchants’ materials on the deal emphasize the group’s role as a port and tollway operator, logistics provider, and container manufacturer in Greater China.

“It’s a business of two halves. Australia’s traditionally been the cash cow,” one source explained to AVCJ. “But Asia is where the growth is.” Sources confirmed that Loscam’s exposure to Asia Pacific and its Australian home ground has helped deliver 14% y-o-y growth for the past five years.

“Loscam is the first major overseas acquisition by China Merchants Group outside of the Asian region,” said Dr. Fu, indicating the growth potential the acquirer sees in the business.

Loscam described the result as “business and usual” for the company and its customers, but China Merchants is evidently planning to roll out and build its business throughout its network. Loscam CEO Mark Daniel said the outcome would “result in a fast tracking of our overall growth plans.”

Loscam was advised by Credit Suisse and Deutsche Bank on the deal, with Minter Ellison as legal counsel. China Merchants was advised by Bank of America Merrill Lynch. 

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• Topics
• Australasia
• Exits
• Industrials
• Affinity Equity Partners
• CHAMP Private Equity
• Pacific Equity Partners