Kerry Logistics to buy China Logistics Co for HKD358.5M
HONG KONG (Dow Jones)–Kerry Properties Ltd. (0683.HK) said Monday it plans to buy a 70percent stake in a Chinese logistics firm for about HKD358.49 million, as it continues to expand its investment in China’s logistics industry.
The Hong Kong property developer said it has reached an agreement to buy the controlling stake in EAS International Ltd., a freight forwarding and logistics services provider in China, from state-owned firm Huatong Industrial Development Co.
Kerry Properties will initially buy a 50% stake in EAS International and then raise its stake to 70percent upon completion of the first transaction, which is conditional on a number of factors including due diligence on EAS International.
According to information submitted by Huatong to Kerry Properties, the net asset value of EAS International as of June stood at HKD376.1 million. Based on that figure, Kerry Properties is paying a premium of 36.2percent above NAV, and 9 times EAS International’s 2003 earnings.
The China logistics firm, a sino-foreign joint venture, reported a net profit of 38.42 million yuan (USD1=CNY8.28) for the six months ended June 30, 2004. It made CNY60.55 million in net profit in 2003, and CNY28.47 million in 2002.
“The acquisition is a strategic step in the expansion and consolidation of the logistics business of the group,” said Kerry Properties Chairman Ang Keng-lam in a statement.
Ang said EAC International has a portfolio of properties that has potential for further appreciation.
