Singapore has handed the world's cashed-up private equity firms a rare bird -- Global Logistic Properties Ltd., a leading provider of modern logistics facilities in China, Japan, Brazil and the U.S.
It's a choice asset, and, valued at $11.3 billion including debt, could shape up to be Asia's biggest-ever buyout deal. Already, it's piqued the interest of Blackstone Group LP, which ironically sold Global Logistic a large chunk of North American assets in 2015, a Warburg Pincus consortium and a Chinese group backed by existing investors in the company.
With so much idle money sloshing around private equity in Asia, expect competition to be spirited.
Investment opportunities in this part of the world aren't always easy to find. Chinese state-owned enterprises don't tend to sell many big assets while family-owned businesses and newly minted entrepreneurs can be loath to let go. That often leaves just Australia and Japan as the main hunting grounds.
Even in those developed markets there are challenges. Intense bidding for assets in Australia has driven up prices, making the search for undervalued companies tough. And Japan, while seeing more sales in recent years as automakers and tech firms exit non-core businesses, remains a hard market for foreigners to penetrate considering opportunities are far and few between. McDonald's Corp., which the Wall Street Journal reported Friday is inviting bids for around one third of its Japanese unit, is bound to get plenty of interest.
So Global Logistic's bankers should be home and hosed. The company has plenty of attractions for a buyout firm, including the possibility of listing some of its funds, as my colleague Andy Mukherjee has suggested. Then there's its sheer size. In the U.S., Global Logistic is the second-largest warehouse operator after real estate investment trust Prologis Inc. and its $39 billion property portfolio comprises some 562 million square feet spanning 2,521 completed properties across 113 cities.
A private equity firm could reap huge gains from selling parts of Global Logistic or partnering with one of its big Chinese tech customers like Alibaba Group Holding Ltd. or JD.com Inc. and eventually having them take assets off its hands. Before deal chatter surfaced in November, Global Logistic was worth about what it was when it went public in Singapore back in 2010. A strategic investor that could combine its own tech or retail assets with those of the company could unlock real value. Unsurprisingly, Alibaba-backed Chinese electronics retailer Suning Commerce Group Co. is another company that's been circling.
Global Logistic also has the benefit of utility-like returns, which should appeal to yield-hungry buyers. In short, it's fast becoming the 2017 must-have asset. Private equity firms, on your marks.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
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