Toll Global Express has passed on the opportunity to buy Scott’s Refrigerated Logistics, with the private equity-owned group opting not to bid for the distressed business.
Offers were received on Thursday for Scott’s, which fell into receivership earlier in the week.
There had initially been 20 parties in the data room weighing up an acquisition of the business.
Market experts say that Scott’s is a good business.
But troubling some suitors had been its large debt levels and also the age of its fleet, consisting of more than 500 trucks and 1000 trailers.
Linfox, considered a highly opportunistic buyer, is also thought to be one of the final suitors.
But it is understood to see high quality fleet of top importance, so would likely factor in the cost of getting the company’s fleet to meet its high standards when it put forward its price.
The other suitor is Lindsay Australia, also a participant in the refrigerated logistics industry.
It is understood that an outcome of the sale process could be known as early as Monday.
It is believed to be a race against time for KordaMentha to find a buyer, with the company running out of funding.
The Australian reported on Friday that KordaMentha has been able to complete an expedited sale process after private equity firm Anchorage had already begun moves to offload the company, including hiring bankers.
Anchorage bought Scott’s from ASX-listed car dealer AP Eagers in mid-2020 for about $75m as a turnaround opportunity.
It is understood that the business has loans worth at least $100m.
Scott’s is the largest refrigerated trucking company in Australia and it is a direct supplier to Coles and Aldi and delivers on behalf of vendors to Metcash IGA stores.
Major customers are being asked for a funding lifeline for the business while a new buyer can be sought.
The transport industry is a low margin business as it is, but refrigerated logistics is even more so, and such companies are highly capital intensive.
Gordon Brothers is owed $70m while Scottish Pacific is also a lender.
The price paid for the business may well be less than the debt after it lost $7.3m for the 16 months to June 2021.
Impacting Scott’s performance has since been impacted by flooding, the pandemic and rising costs.
Anchorage also appointed McGrath Nicol working as voluntary administrator.
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