Singapore Post (SingPost) says it will be acquiring an additional 37% interest in Australian services provider, Freight Management Holdings (FMH), for A$175.4 million ($161.0 million).
This brings SingPost’s total stake in FMH to 88% from 51% previously. SingPost first acquired a 28% stake in FMH in December 2020. It then upped its stake to 51% in November 2021. The latest acquisition was made via SingPost’s wholly-owned subsidiary, SingPost Australia Investments Pty Ltd.
The transaction will be funded by the group’s cash reserves and available bank loan facilities. The group’s cash reserves stood at $435.8 million as at Sept 30, 2022.
The 37% stake that’s being acquired will comprise two tranches of shares. The first tranche, which amounts to an interest of 23.5%, is exercised under the first offer to buy. The second tranche, at 13.5%, is based on terms under the second offer to buy.
Exercise periods for subsequent offers to buy granted to FMH vendors will be advanced and evergreen call options will be granted for the remaining 12% stake as a pathway to full ownership as well, says SingPost.
FMH is the leading fourth party logistics (4PL) services provider in Australia. It provides integrated supply chain and distribution services through a proprietary technology platform. According to SingPost, FMH has been expanding its geographical reach and third party logistics (3PL) capabilities. This comes as part of the group’s strategy to develop a digitally enabled integrated B2B and B2C logistics business.
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“The strategic acquisition of FMH is a key move in strengthening the SingPost group in the overseas logistics space. FMH has performed strongly since our initial investment and is a key growth driver in the group’s Logistics business,” says Vincent Phang, SingPost’s group CEO.
“We have made good progress in combining the capabilities of our Australian businesses, leveraging each of their capabilities. This strategic acquisition gives us access to FMH’s digitally enabled logistics capabilities, and with our last-mile delivery network in CouriersPlease, allows us to offer customers technology-led integrated B2B and B2C logistics solutions in the Australian market. This would play a key role in us being a logistics player of choice in the Asia Pacific,” he adds.
CouriersPlease, a first- and last-mile delivery courier network covering 90% of the population in Australia, is also owned by SingPost.
As at 2.50pm, shares in SingPost are trading 0.5 cent lower or 0.94% down at 52.5 cents.
