Loscam owners including CMG, Citic consider selling pallet company in US$2 billion-plus deal, sources say
- Company jointly owned by China Merchants Group, Citic Capital and Fountainvest Partners has approached a number of potential buyers: sources
- Loscam hires out pallets and other packaging equipment in 12 Asia-Pacific countries to transport goods
Owners of Asian pallet pooling provider Loscam are considering a sale of the entire company in a deal that could fetch over US$2 billion, three people with knowledge of the situation said.
Loscam, which is jointly owned by China Merchants Group (CMG), Citic Capital and Fountainvest Partners, has approached a number of potential buyers, including infrastructure funds, to discuss the sale, the people said.
The discussions are at an early stage and the structure of the deal is not finalised, the sources said.
The owners are aiming to wrap up the sale by the end of the year, said a fourth person with direct knowledge of the deal.
Loscam hires out pallets and other returnable packaging equipment for retailers and food, beverage and grocery manufacturers in 12 Asia-Pacific countries to transport goods.
Its estimated earnings before interest, taxes, depreciation, and amortisation (Ebitda) are about US$200 million, said two of the sources.
Loscam’s valuation ask could exceed US$2.5 billion based on a multiple in the low teens over its Ebitda, one of them said.
Sellers and buyers, however, may have different expectations of the Ebitda multiple, the people said.
The owners attempted to sell the company’s Australia and New Zealand businesses in early 2022, but the sale did not proceed as interest-rate hikes distracted buyers, said the fourth source.
The owners would prefer to sell the entire company than pieces of it in the current discussions, the sources said.
Loscam, CMG and Hong Kong-listed Sinotrans, the CMG subsidiary that holds its Loscam stake, did not immediately respond to Reuters requests for comment. Citic Capital and Fountainvest declined to comment.
Hong Kong-based conglomerate CMG acquired then Australia-based Loscam in 2010 from private equity firm Affinity Equity Partners for an undisclosed sum.
In 2018, CMG via its subsidiary Sinotrans sold a 55 per cent stake in Loscam to Citic Capital and Fountainvest for about 2.5 billion yuan (US$345 million), Sinotrans said at the time.
Citic bought 33 per cent in Loscam and Fountainvest 22 per cent, the disclosures at the time showed.
One of Loscam’s main rivals is Chep, owned by Australian firm Brambles. Loscam bought Chep’s China business in 2022 for US$132.2 million, including debt.
