Initial bids for Loscam weeks away

Loscam describes itself as a trusted name in pooling and returnable packaging solutions for supply chains.

Bidders keen to buy the $3bn-plus logistics company Loscam are getting organised to lob their first round offers around the middle of next month.

But the official first round bid deadline has not yet been set under a process that is leaving some a little confused.

Shareholders of Loscam are believed to have differing views as to what exactly they want to sell.

China Merchants purchased the business in 2010 for $US650m in a deal involving Credit Suisse and Deutsche Bank, and in 2018 it sold down a 55 per cent interest to CITIC Capital Partners and FountainVest.

One line of thought is that all of Loscam is for sale – the Australian and New Zealand operations, the Southeast Asia business and the Chinese operation that include the Chep China business it purchased from Brambles.

Others say that they are being broken up and offloaded to different groups.

Meanwhile, Loscam’s adviser, UBS remains in the background working hard to get a deal across the line after two earlier attempts for a sale in the past two years which resulted in the company being retained by the owners.

So far, it is expected to be an infrastructure fund shootout; Kohlberg Kravis Roberts is thought to be the best placed to buy the business and is working with investment bank Morgan Stanley.

DataRoom can also reveal that Stonepeak is working on a potential acquisition of the company after in the past weighing up a purchase.

EQT had been looking but is understood to no longer be in the mix.

Other possibilities are The Carlyle Group, although it may be less competitive against the infrastructure buyers which may also include Morgan Stanley Infrastructure and Brookfield.

It is understood that management presentations have been held with the prospective suitors and first round bids are expected to be due in mid July.

With a date not yet set, some are nervous about a repeat of the past, where bidders carry out work only to learn that the process has been called off.

As earlier reported, UBS went to about 10 parties to test their interest in Loscam in recent weeks.

Loscam fits the description of “core plus” infrastructure, where the assets have steady earnings streams similar to infrastructure-style assets.

It is believed that the annual earnings before interest, tax, depreciation and amortisation for the Australian, New Zealand and Asian operations, including China and Southeast Asia, are at least $200m.

Loscam’s owners are looking for a price somewhere between 13 and 15 times that number, which puts the sale price at more than $3bn.

The logistics business describes itself as a trusted name in pooling and returnable packaging solutions for supply chains.

If the portfolio is split in two, buyers like Brambles may enter the frame for the Southeast Asian arm.

Pallets are not as widely used in Southeast Asia, which creates an opportunity for a buyer to grow earnings there.