NOL Looks to Sell APL Logistics Unit

Admin– Singapore’s Neptune Orient Lines Ltd is hoping to sell its APL Logistics division for more than $750 million, according to people familiar with the matter.

Shipping and logistics company Neptune is comprised of two major divisions – APL Logistics, a global freight management and logistics business, and a separate container shipping business named APL.

Neptune plans to launch a process in the next few months to find a buyer for APL Logistics and has hired banks to assist with that effort, the sources said, asking not to be named.

NOL said it was considering a sale or initial public offering and listing of its logistics business as a separate unit, though such considerations were preliminary.

The logistics business had earnings before interest, taxes depreciation and amortization of $74.5 million according to the division’s 2013 financials.

Neptune hopes to fetch between 10 and 12 times that amount in a potential sale, or between $750 million and $900 million, according to the people familiar with the matter. However, buyers are likely to value the business at closer to $600 million, the sources said.

Despite APL Logistics’ positive performance in 2013, the parent company posted a net loss of $76 million on $8.8 billion of total revenue.

The APL Logistics business accounted for 18 percent of Neptune’s total 2013 revenue.