Newsletter Edition 49
Dec 5, 2024
4 min read
Pacific Equity Partners to Acquire SingPost’s Australian Business FMH for $505 Million
Singapore Post Limited (SingPost) has announced the sale of its Australian logistics business, Freight Management Holdings (FMH), to private equity firm Pacific Equity Partners (PEP) for AUD775.9 million ($505.4 million). The deal, valued at an enterprise value of AUD1.02 billion, is expected to generate a gain of approximately SGD312.1 million ($233.1 million), subject to completion adjustments.
The sale follows a strategic review of SingPost’s portfolio initiated in July 2023. Last week, the company revealed it was in exclusive discussions regarding the potential divestment of FMH.
“The Board believes this divestment is the best option for shareholders by crystallizing the unrealized value of the business and bringing forward unlocking value for shareholders,” said SingPost Chairman Simon Israel.
PEP Managing Director David Brown commented on the acquisition, stating, “FMH Group has a stellar track record of growth, a passionate team, and a clear and compelling trajectory. We look forward to supporting them to build on their success and facilitate further opportunities.”
SingPost plans to use a portion of the proceeds to repay AUD362.1 million in Australian Dollar-denominated debt related to the FMH acquisition, as of September 30, 2024. The company is also considering the payment of a special dividend to shareholders, pending an evaluation of future funding requirements.
FMH has demonstrated strong growth under SingPost’s ownership, making it an attractive acquisition target for PEP. The transaction highlights SingPost’s strategic focus on streamlining its portfolio to maximize shareholder value while enabling FMH to continue its growth trajectory under PEP’s stewardship.
The deal marks another significant transaction in the logistics sector, showcasing ongoing private equity interest in acquiring high-growth logistics and eCommerce assets.
PE Consortium to Take ESR Group Private in $7.09 Billion Deal
A private equity consortium led by Starwood Capital Group and Warburg Pincus has made a $7.09 billion (HKD55.19 billion) bid to take Hong Kong-based real estate investment firm ESR Group private. The offer, announced on Wednesday, represents a 55.7% premium to ESR’s closing price on April 24, before the non-binding proposal was submitted.
The bid offers shareholders three options: HKD13.00 per share in cash, an equity share exchange for every existing share held, or a combination of cash and equity. As of December 4, 51.2% of disinterested shareholders have irrevocably committed to supporting the proposal.
This move underscores the consortium’s confidence in ESR Group as China seeks to recover from a severe property market downturn. ESR’s stock has declined 60% since its February 2021 peak, reflecting broader challenges in the real estate sector.
ESR Group, a prominent player in property-focused funds and investments, went public in 2019 with a $1.6 billion IPO at HKD16.8 per share. The company has applied to the Hong Kong Stock Exchange to resume trading on December 5, following a temporary halt last week.
Morgan Stanley Asia and Deutsche Bank AG, Hong Kong Branch, are acting as co-lead financial advisers for the consortium, with JLL serving as real estate adviser. The consortium initially formed in May, led by Starwood Capital, Sixth Street Partners, and SSW Partners. It later expanded to include Warburg Pincus, ESR’s largest shareholder with a 14% stake, and Qatar Holding, a subsidiary of the Qatar Investment Authority.
The offer highlights continued private equity interest in the real estate sector, particularly in Asia, as the region recovers from economic and property market disruptions. If successful, the deal will privatize ESR Group, enabling the company to refocus on long-term growth strategies under private ownership.
https://www.reuters.com/markets/asia/consortium-take-hk-listed-esr-group-private-709-bln-2024-12-04/
TPG Eyes $1.5 Billion-Plus Sale of Crunch Fitness
Private equity giant TPG is preparing to sell Crunch Fitness, a global gym chain that could be valued at over $1.5 billion, including debt, according to a Reuters report citing unnamed sources. TPG, which acquired Crunch through its mid-market investment arm, is working with Jefferies to explore the sale, with the process expected to begin in the first half of 2025.
Crunch Fitness, which generates an estimated $100 million in annual EBITDA, may attract interest from other private equity firms. Based on industry benchmarks, the chain could be valued at more than 15 times its EBITDA. Neither TPG, Jefferies, nor Crunch Fitness have commented on the potential sale.
The fitness and wellness industry remains a popular target for private equity due to its predictable cash flows from subscription-based memberships and scalability through franchising. Recent deals in the sector include L Catterton’s acquisition of Pilates chain Solidcore for $600–$700 million in September and 26North Partners’ purchase of OneLife Fitness in October.
Founded in 1989 in New York City’s Greenwich Village as a basement gym, Crunch Fitness has evolved into a global fitness brand serving approximately 2.5 million members across more than 460 locations. Its footprint spans the U.S., Australia, Canada, Costa Rica, Portugal, Puerto Rico, and Spain, making it one of the most recognizable names in the industry.
Crunch Fitness’s strong membership base, proven franchising model, and established global presence make it an attractive acquisition target. The anticipated sale underscores the continued interest in fitness-related investments, particularly as the sector rebounds from the pandemic and consumers prioritize health and wellness.
The sale, if successful, could mark another high-profile transaction in the fitness industry, further highlighting the enduring appeal of the sector to private equity investors.