Baring mulls IPO option for Logen Logistics to cash out after repeated sale failure

South Korea’s parcel delivery company Logen Logistics is considering initial public offering (IPO) to enhance its value and make it more attractive to potential buyers after its sales attempt fell through several times.

Logen Logistics is discussing IPO option with its lead manager Mirae Asset Securities, according to industry sources.

Although IPO details are not determined, existing shares could take up a bulk of the offering as the largest shareholder Baring Private Equity Asia (BPEA) is eager to cash out. BPEA acquired a 100 percent stake in Logen Logistics in 2013 and has been trying to sell the company since 2015 without any success.

Logen Logistics selected Well to Sea Investment as the preferred bidder in June last year, but the deal broke down as the PEF failed to find investors. Since then, various companies and PEFs including Credian Partners and CJ Partners showed interest, but no meaningful progress has been made yet.

Logen Logistics is the country’s fourth largest package delivery company following Lotte Global Logistics, CJ Logistics and Hanjin Transportation. Its operating profit and revenue more than doubled from the previous year to 29.3 billion won ($25.8 billion) and 512.8 billion won, respectively, in 2020, on the back of surging demand amid Covid-19. Net profit also grew to 18.5 billion won last year from 15.3 billion won a year ago.

The price-to-earnings ratio (PER) of its bigger rivals CJ Logistics is at 31 times and Hanjin Transportation 68. The average PER for the parcel delivery company is around 13 times.

Market analysts believe the rising demand for parcel delivery could be a boon to the company but the high portion of existing shares could lower its IPO value.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]