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SingPost extends e-commerce reach with US$168m buy in US

Acquisition of 96.3% stake in TradeGlobal Holdings comes just days after announcement that it is buying logistics enabler Jagged Peak
Friday, October 16, 2015 - 05:50
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SingPost's POPStations at Geylang West Community Club.

Singapore

SINGAPORE Post (SingPost) announced on Thursday its acquisition of a 96.3 per cent stake in leading US end-to-end e-commerce provider TradeGlobal Holdings - less than a week after it unveiled plans to buy e-commerce logistics enabler Jagged Peak.

The acquisition of TradeGlobal Holdings from TradeGlobal Parent LLC, at US$168.6 million, will be undertaken by SingPost's indirect wholly-owned subsidiary, TG Acquisition Corporation. TradeGlobal Parent LLC is owned by private equity firm Bregal Sagemount.

SingPost group chief executive Wolfgang Baier said in a conference call: "We are following our customers. Our customers gave us feedback that e-commerce is becoming more global, and they would like us to help them in the US and beyond."

With this transaction, SingPost's clients in Asia-Pacific will be able to expand their businesses into the US; likewise, TradeGlobal's clients will have access to Asia-Pacific.

As the e-commerce platforms and warehouse networks of SingPost and TradeGlobal are complementary, their clients can expect to leverage integrated technology and fulfilment capabilities; this combination creates a one-stop global solution. Marcelo Wesseler, chief executive officer of SingPost e-commerce, said: "This acquisition strengthens our e-commerce logistics platform by enhancing our scalability and capabilities, for instance, to handle major surges in traffic and transactions during peak shopping seasons."

Just last Friday, the provider of mail, logistics and e-commerce solutions announced that it had agreed to acquire a 71.1 per cent stake in Jagged Peak for US$15.8 million.

The American company, which recorded revenues of US$61.7 million for the year ended December 2014, has a proprietary and accredited e-commerce logistics platform which is used by more than 20 warehousing facilities across the US, Canada and Europe.

The acquisition of TradeGlobal, one of the top five end-to-end e-commerce players in the US, follows on that acquisition. The founders of TradeGlobal, executive chairman Dave Cook and chief executive officer Dave Eckley, will continue in their current positions as executives and shareholders.

TradeGlobal has more than 60 international fashion, beauty and lifestyle brands and over 50 fulfilment centres globally, noted Dr Baier. "With this network, we cover Asia and the US, and these are the two largest e-commerce networks in the world." He joined SingPost in 2011 to oversee the growth in non-mail products; as CEO now, he is spearheading the postal company's transformation.

As the result of aggressive moves in the e-commerce space, its subsidiary SingPost eCommerce Pte Ltd now provides more than 1,000 companies with services ranging from the setting up e-commerce websites to sorting out goods at warehouses, organising shipments, sorting out customs clearance and even providing call-centre support.

SingPost has also been shedding its stakes in the more traditional spheres of the postal business. This year, it sold its whole stake in Novation Solutions Limited and DataPost (HK) Pte Limited for S$24.4 million, and a 90 per cent stake in DataPost Pte Ltd to Jing King Tech Solutions Pte Ltd for S$39.3 million.

Dr Baier said: "We are clearly one of the top global leaders in e-commerce logistics, so the focus now is integrating that and developing synergies."

In a note, rating agency Standard & Poor's said SingPost's balance sheet should be able to support its acquisitions. "We believe the acquisitions of TradeGlobal and Jagged Peak will add geographic diversity to SingPost's still largely Asia-focused operations. They will also boost the company's ability to provide e-commerce solutions to its clients on a more global basis.

"Both these factors underpin our view of the quality of SingPost's business," it said.

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