이 기사는 2019년 11월 04일 08:00 thebell 에 표출된 기사입니다.

Hong Kong-based private equity firm Baring Private Equity Asia (BPEA) is accelerating the sale of Logen Logistics, South Korea's package delivery firm.

According to mergers and acquisitions (M&A) industry sources on October 29, BPEA picked Citigroup Global Markets as lead manager last month to prepare for the sale and began marketing for potential buyers. BPEA and Citigroup Global Markets have conducted a seller's due diligence since early October.

The seller side is planning to send teasers to potential buyers who show interest in the target company. The seller is likely to determine the timeline for the bidding while 'tapping' the market.

The logistics service company currently is the fifth largest company in the domestic logistics market, being in tight competition with Korea Post's Logistics. The market expects the deal will draw attention from strategic investors and financial investors at home and abroad who have a great interest in logistics business.

This is not the first attempt by BPEA to sell the logistics service company. In 2016, BPEA discussed the sale with global logistics company UPS. At the same year U.K.-based CVC Capital Partners (CVC) agreed to buy from BPEA the entire shares in Logen at 330 billion won. However, a couple of months later CVC canceled the acquisition, complaining BPEA did not properly disclose financial and business conditions. A lengthy legal fight between BPEA and CVC caused delay in the exit process of Logen.

Now, with the company put up for sale again, many market watchers are paying their attention to its enterprise value. Market watchers see with BPEA's continuous effort to the enhancement of enterprise value allowed the company to improve its financial structure. According to BPEA's audit report at the end of last year, the private equity firm put additional 100 billion won to lower Logen's debt ratio. It is said the movement paves the way for the sale. Logen's debt ratio, which peaked at 457 percent in late 2017, dropped markedly to 27.18 percent at the end of last year.

Also, in 2017, BPEA sold its money-losing KGB Logistics to KG Logistics. BPEA acquired KGB to increase its market share in 2015, two years after it acquired Logen.

Logen's earnings before interest, taxes, depreciation and amortization (EBITDA) is at nearly three times greater than seven years ago. As of the end of 2012, right before Logen was acquired by BPEA, its EBTIDA amounted to 14.2 billion won. Its EBITDA recorded 27 billion won at the end of last year and it is expected to exceed 40 billion won this year.

The logistics company's operating profit margin is higher than that of peers in the same industry. As of the end of last year, Logen's recorded sales of 371.7 billion won, operating profit of 20.7 billion won, operating profit margin of 5.5 percent. CJ Logistics, the largest delivery firm in the country recorded operating profit margin of 1.8 percent last year. Hanjin Express posted 2.1 percent. Lotte Global Logistics recorded a loss of 17.8 billion won over the same period. Uncertainties like how the market will react to the company's asset-light business model and its agency system is likely to determine the popularity of the deal.

The deal marks BPEA's first buyout in Korea. BPEA paid 158 billion won to acquire a 100 percent stake in Logen from Mirae Asset Nice Private Equity Fund in 2013.

(By reporter Kim Hye-ran)