Li & Fung Announces Investment of US$300 Million by Temasek in LF Logistics
- Investment to accelerate LF Logistics’ strong growth momentum
- Proposed spin-off IPO of LF Logistics is postponed until further notice
- Post completion, Temasek will hold 21.7% and Li & Fung, the controlling shareholder, with 78.3%
Li & Fung Limited (“Li & Fung,” “the Group,” or “the Company;” SEHK: 494), the world’s leading supply chain solutions partner for consumer brands and retailers, today announced it has entered into a Subscription Agreement with Temasek, the Singapore-headquartered investment company (“Temasek”), for a cash consideration of US$300 million for approximately 21.7% stake of its Logistics business (“LF Logistics”).
The investment values LF Logistics at approximately US$1.4 billion on a post-money equity valuation basis. Upon completion, Li & Fung will remain a controlling shareholder of LF Logistics, which at a 78.3% stake equates to approximately HK$1 of the Company’s current share price. Proceeds from the investment will be used to fund future capital expenditures, repay existing bank facilities and accelerate business growth initiatives at LF Logistics. As a result of this investment, the proposed spin-off IPO will be postponed until further notice.
LF Logistics has achieved multiple-year double digit organic growth and it maintains strong momentum from multiple growth drivers, including robust growth in China, the e-logistics boom, accelerated development in ASEAN across all of its services, and its rapid expansion into new geographies including Japan, Korea and India.
Joseph Phi, Group President, Li & Fung said, “We expect the strong growth of LF Logistics to continue. With operations in all of Asia’s fastest growing cities, we are well positioned to capitalize on rising middle class consumption and our early investment in e-logistics allows us to enjoy first-mover advantage. Our logistics strength combined with Li & Fung’s sourcing and new digital supply chain solutions, represents a unique end-to-end offering that encompasses the entire value chain.”
Spencer Fung, Group CEO, Li & Fung added, “The investment from Temasek will allow us to unlock the value of LF Logistics and accelerate its business growth. It will also enhance Li & Fung’s capital structure and financial flexibility. Our strong operating cash flow and solid balance sheet provides us with ample liquidity to fund future growth and complete our transformation efforts, as we execute our Three-Year Plan goal of creating the Supply Chain of the Future.”