Yang Kee Logistics Pte Ltd has announced that it has entered into a Scheme Implementation Agreement with New Zealand Exchange Mainboard listed company, Fliway Group Ltd. This will be Yang Kee’s second major Oceania acquisition this year with the support of International Enterprise (IE) Singapore.
The acquisition value of S$52.1 million for 100 per cent of the shares in Fliway would boost the group’s revenue by another S$81.9 million with a stronger foothold in the Oceania market. This announcement comes on the back of its first Oceania acquisition of Australia logistics company Axima Pty Ltd in March this year. The combined Yang Kee group will have a headcount of over 1050 employees across 12 countries, and an expected revenue of over S$400 million once the acquisition is fully completed.
Under the SIA, it is proposed that Yang Kee acquires all the outstanding shares in Fliway for NZ$1.22 cash per share by way of a scheme of arrangement. The scheme is conditional on the approval of Fliway’s shareholders and the High Court, amongst other things.
“It is part of our vision to strengthen our presence in Oceania as we go global. New Zealand has a stable currency and economic outlook, a growing middle class, and a demand for integrated freight and logistics solutions. New Zealand also enjoys strong trade relations with Australia, with bilateral trade reaching NZ$24 billion for the year ended March 2017. We hope to yield greater synergies from the network integration of shared international freight volumes between Fliway and Axima and cross selling opportunities in their combined customer bases to Asia,” said Ken Koh, group CEO of Yang Kee Logistics.
Fliway is one of New Zealand’s largest fully integrated logistics providers. Having over 40 years of operational experience in New Zealand, it has established strong domestic capabilities in transport and warehousing with substantial presence in the electronics and consumer industries.
Fliway also has an established international division with a freight arm. One of New Zealand’s largest customs brokers, it is consistently ranked amongst the top customs lodgers of entries by volume. This complements Yang Kee’s earlier strategic acquisition of Australian based company, Axima, to facilitate cross Oceania trade between Australia and New Zealand, as well as trade flows between Oceania and Yang Kee’s existing networks in South East Asia and China.
“This is a significant milestone for Fliway, and reflects our long held view that there are strong growth opportunities that come from leveraging a larger geographic footprint across Oceania and Asia. Being part of the Yang Kee Group delivers on that and provides scale to support Fliway’s customers, both in New Zealand and throughout the Asia Pacific region,” said Duncan Hawkesby, managing director of Fliway Group Ltd.
IE Singapore partners Yang Kee Logistics in its global growth strategy
Yang Kee is partnering IE Singapore as it embarks on an acquisition strategy to gain new networks and capabilities to become a global logistics player. IE Singapore worked with Yang Kee to deepen its foothold in these markets and enhance its end-to-end supply chain networks. This included connecting them to business development leads and providing support in feasibility studies, due diligence, financial and legal professional services for the acquisition of both Fliway and Axima.
Recognising the importance of a robust and global recruitment HR strategy to support its growth, Yang Kee is working with IE Singapore to develop an international manpower strategy to build a global team, with its Singapore headquarters setting the standards and best practices.
Said Law Chung Ming, group director for Transport & Logistics, IE Singapore, “The combined strengths of Axima and Fliway enhance Yang Kee’s global networks and supply chain capabilities. Furthermore, their logistics solutions will now serve as a resource for other Singapore companies to access the Australia and New Zealand markets. As we work with Yang Kee on its next stage of growth, talent development will be very critical. Specifically, we need to groom talent with specialised logistics skillsets for new business segments, and market ready skillsets for deep understanding of market needs.”
For example, to help Yang Kee meet its global manpower needs, IE Singapore supported the company in building presence on LinkedIn, working on a digital employer strategy to engage and recruit relevant employees. Yang Kee is also one of the first few companies on board IE’s Professional Conversion Programme (PCP) – South East Asia Ready Talent for logistics, with two candidates taking part in the programme. They will receive on-the-job training and gain exposure to regional logistics projects, building the company’s manpower capabilities in specialised logistics.
Yang Kee has also worked with SPRING Singapore to develop relevant skills and knowledge among its employees through a career development pathway. With SPRING’s support, Yang Kee also developed new business capabilities such as specialised services for the chemicals and oil & gas sectors with the launch of its Chemical Logistics Hub, enabling it to secure contracts with large global chemical clients.
Financing of the acquisition
The acquisition of Fliway was financed by the Australia and New Zealand Banking Group Limited as well as United Orient Capital, a special situation fund sponsored by the United Overseas Bank Limited.
Yeo Wee Yap, executive director of United Orient Capital said, “Yang Kee’s experienced management team has helped the group successfully broaden its footprint across the region. We are pleased to support Yang Kee’s internationalisation plan and we look forward to working closely with the group as it embarks on the next phase of growth with its expansion into New Zealand.”
ANZ is the sole mandated lead arranger, underwriter and bookrunner for Yang Kee’s acquisition of Fliway, as well as the earlier acquisition of Axima.
Chief executive officer Singapore and head of South East Asia, India and Middle East, ANZ, David Green said, “We are pleased to lead the financing for Yang Kee’s acquisition of Fliway, building on the success of their recent acquisition of Axima which we also supported as lead arranger. We have a strong partnership with Yang Kee and are proud to play a role in supporting their growth strategy alongside important partners like IE Singapore, drawing on our cross-border product capability, transport and logistics sector insights and network across Asia, Australia and New Zealand.”