Executive Briefings

Kintetsu World Express Looks to Gobble Up APL Logistics

Japanese freight carrier Kintetsu World Express Inc. is buying Singapore's APL Logistics for $1.2bn, paying a higher than anticipated price for an overseas deal at a time of slow domestic growth.

Tokyo-headquartered Kintetsu Express said that it agreed to pay 144 billion yen ($1.21bn) to buy all of APL's shares from its parent, Neptune Orient Lines (NOL). Its own capital and bank loans will be used to fund the deal, it said.

At the close of Tokyo trading, Kintetsu Express was worth $1.5bn by market value. As of end-December, it had current assets of 119 billion yen, including 50 billion in cash and deposits.

The expected APL Logistics deal value is far higher than the $750m to $900m range that sources said Singapore-based NOL had been looking for. Such a range would have valued the unit at 10 and 12 times its earnings before interest, taxes depreciation and amortization for 2013.

The price tag may confound skeptics who had suggested offers for APL Logistics could be closer to $600m, due to weak global freight rates.

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Tokyo-headquartered Kintetsu Express said that it agreed to pay 144 billion yen ($1.21bn) to buy all of APL's shares from its parent, Neptune Orient Lines (NOL). Its own capital and bank loans will be used to fund the deal, it said.

At the close of Tokyo trading, Kintetsu Express was worth $1.5bn by market value. As of end-December, it had current assets of 119 billion yen, including 50 billion in cash and deposits.

The expected APL Logistics deal value is far higher than the $750m to $900m range that sources said Singapore-based NOL had been looking for. Such a range would have valued the unit at 10 and 12 times its earnings before interest, taxes depreciation and amortization for 2013.

The price tag may confound skeptics who had suggested offers for APL Logistics could be closer to $600m, due to weak global freight rates.

Read Full Article