SingPost Seeks Investors’ Nod to Sell Its Australian Business

Singapore Post Limited (SingPost) on Wednesday said that it will hold an Extraordinary General Meeting (EGM) on 13 March 2025 to seek shareholders’ approval for the proposed divestment of its Australia business, Freight Management Holdings Pty. Ltd. (FMH), held through SingPost Australia Investments Pty Ltd (SPAI) to Pacific Equity Partners (PEP) for an enterprise value of $650 million.

SingPost’s Board is of the view that the headline valuation of $650 million reflects the intrinsic value of the business. In the event that shareholders do not vote in favour of the proposed disposal, the Board will review and reconsider its strategy in relation to its Australian business.

FMH, a leading technology-enabled logistics provider, has grown significantly since SingPost’s initial investment in 2014. Formed through strategic acquisitions and mergers, including CouriersPlease and Border Express, FMH has become among the top 5 logistics players in Australia by revenue.

SingPost Chairman Simon Claude Israel said that the EGM provides their shareholders with the opportunity to vote on this important transaction, which the company believes will unlock substantial value.

“The proposed divestment delivers a strong return on our investment in Australia. It crystallises the unrealised value of the business and brings forward unlocking value for shareholders. We encourage all shareholders to review the details of the transaction and participate in the EGM,” he said.

In July 2023, SingPost’s Board initiated a strategic review of the SingPost Group’s portfolio of businesses, with a view to enhancing shareholder returns and ensuring that the SingPost Group is appropriately valued.

In March 2024, the Board outlined its strategic intentions for the businesses and in line with this, initiated a strategic review specifically for the Australia business to formulate optionalities for the Group.

In the course of the strategic review, the SingPost Group received unsolicited interest in the acquisition of FMH, leading to an international competitive bid process conducted by Bank of America (BofA).

Use of Proceeds

From the divestment, the SingPost Group expects to receive gross proceeds of approximately $490.64 million in cash, which is in excess of the net asset value (NAV) of SPAI as at 30 September 2024.

The transaction is expected to generate a gain on disposal of approximately $216.4 million. The levered return on equity is approximately four times the SingPost Group’s $59.19 million equity investment in FMH over the last four years.

The SingPost Group intends to utilise some of the proceeds to repay borrowings, in particular, its Australian Dollar-denominated debt amounting to $228.98 million as at 30 September 2024 undertaken for the financing of the acquisition of FMH.

The Board is also considering the payment of a one-tier tax-exempt special dividend, subject to the completion of the proposed disposal. Further announcements on the special dividend will be made at an appropriate time when the year-end financial statements of the Group are released.

The Board will in due course disclose the amount of the Special Dividend and the amount of residual proceeds that would be retained, subject to the outcome of the strategy reset.

Given the materiality of the sale of the Australian business, the Board said that the SingPost Group will need to reset its strategy after the completion of the proposed disposal.

The Board will consider the progressive divestment of the Group’s non-core assets to pay down debt and create a pool of funds to re-invest subject to its strategy reset and/or return to shareholders, while at all times ensuring the Group is appropriately funded.