The Carlyle Group has recently embarked on due diligence of South Korea’s Logen Co. Ltd. for a possible acquisition, following another private equity firms CVC Capital Partners and Affinity Equity Partners which rekindled interest in the parcel delivery company last month, according to investment banking sources on August 23.
Logen, unlisted and the fourth-biggest package delivery firm in South Korea, is wholly owned by Baring Private Equity Asia (PEA). It has been put up for sale since earlier this year. Baring PEA had reportedly hoped to fetch around 400 billion won ($356 million) from the planned sale, or about 2.5 times as much as it had paid a South Korean private equity firm for the acquisition in 2013.
But shortlisted bidders in the preliminary bidding process in March – Germany’s DHL, UPS and a South Korean private equity fund – had all dropped out of the auction because of its high price tag. CVC and Affinity, which also had placed preliminary bids for Logen, reportedly suggested between the upper end of the 200 billion won range and the lower end of the 300 billion won range.
No further details are known yet on Carlyle’s possible bid for Logen, while another private equity house KKR & Co. is understood to have interest in the South Korean logistics firm.
Explosive online shopping growth has brightened the outlook for parcel delivery firms. But Carlyle’s participation in the bidding for Logen may not translate into a higher price tag, industry sources said.
“PEFs cannot help but think about exit plans,” an IB source told the Korea Economic Daily. “In the first round of the sale process, it was confirmed that strategic investors were not keen (on Logen), so PEFs will not likely stretch themselves to buy it for a high price.”
Unlike bigger South Korean parcel delivery firms under large business groups such as CJ and Hanjin, Logen does not have its own logistics infrastructure, but charges fees for matching transport companies with individual businessmen involved in parcel delivery services.
By Chang Jae Yoo and Sanghun Oh
<Edited by Yeonhee Kim>