Growthgate Capital, the Gulf-based investment firm announced that it has exited from its investment in Able Logistics Group (Able) by selling its 70 per cent equity stake therein to Kerry Freight Services (South Asia) Pte. Ltd., a wholly owned subsidiary of Kerry Logistics Network, for $32m (subject to certain adjustments).
Taking into account this transaction and prior dividends received, Growthgate Capital has realized a 3x returns on its investment in Able. The preparations for Able’s IPO which were announced in Q1 2014, were set aside indefinitely in favor of Kerry’s strategic buyout offer.
Able is a leading freight forwarder and logistics provider headquartered in Dubai, with additional operating bases in the Middle East and other key hubs in the Near and Far East. The transaction involved the acquisition of 70 per cent of Able’s capital stock by Kerry Freight Services (South Asia).
Kerry Logistics Network, the owner of Kerry Freight Services, is a publicly listed company in Hong Kong (stock code 00636) with a total market cap of HK$20.5bn as at December 29, 2014. Kerry is one of Asia’s major logistics providers with a global network that stretches across six continents, including an extensive distribution network and hub operations in Greater China and the ASEAN region.
Growthgate first invested in Able in 2007, when operations were limited to the UAE and few Asian destinations. Today the company operates from multiple bases in Dubai, Sharjah, Oman, Saudi Arabia, Afghanistan, and Hong Kong, with over 500 corporate customers including multinationals in diversified sectors such as electronics, food, and fast moving consumer goods. Able’s management expects to achieve $135m in total revenues in 2014.
“We have always believed in Able’s business model, and the outstanding team led by Dr. Ghanem Al Hajri, Executive Chairman and Vijay Vikram, CEO. Since 2007, we have been continuously impressed by their commitment to delivery and the phenomenal results achieved. This is a great development for Able, as Kerry is the best strategic partner to take the company forward and give the senior management team the opportunity to propel the business on a wider scale as part of a global platform,” commented Karim A. Souaid, General Manager of Growthgate Capital.
“Since its establishment in 2001, Able has delivered consistent and outstanding growth quarter after quarter. Starting from scratch, the company has gained a significant market share of the corporate logistics and freight forwarding market in little over ten years, in a highly competitive and concentrated context, and a difficult economic climate. This tremendous success is the result of the combination of an ambitious project with a faultless execution by a great management team. We have consistently supported and funded Able, and are proud of its achievements,” added Souaid.
Vijay Vikram, CEO and co-founder of Able said, “We have very much appreciated the steadfast support from Growthgate throughout the past years. As the only institutional investor in the company, Growthgate took the initial risk, and continued to support us ever since, committing valuable time, capital and efforts to build-up the platform in different markets and varying economic cycles. Growthgate has simply been an ideal growth partner.”
White & Case acted as international counsel for Growthgate Capital on the transaction whereby HLP LLC acted as local counsel. PwC further advised Growthgate on specific finance and accounting aspects of the transaction.