Baring PEA exits from Korean delivery firm in eight years

Baring Private Equity Asia has finally cashed out of South Korea's No. 5 parcel delivery company with a double-digit return, in eight years since it acquired the entire stake in Logen Co.

On Friday, Baring PEA signed a definitive agreement to sell its 100% stake in Logen to South Korea's medium-sized fashion mall operator Dae Myung Chemical Co. The sale, managed by Citigroup Global Markets, fetched about 340 billion won ($300 million).

Back in 2013, the Hong Kong-based private equity firm took over Logen for 158 billion won and then acquired its smaller domestic rival for 25 billion won in 2015 to combine both companies. 

The divestiture was made in its third attempt. Its two previous efforts to sell Logen in 2016 and 2020 fell through in the final stages of talks. At the time, the preferred negotiators were CVC Capital Partners in 2016 and Seoul-based Well to Sea Investment in 2020.

In May of this year, Baring had resumed the process of taking public Logen, but halted the IPO after it entered talks with Dae Myung.

Logen holds a 10% share of the country's parcel delivery service market, trailing behind CJ Logistics Corp., Hanjin Transportation Co., Lotte Global Logistics Co. and the state-run Korea Post.

The explosive e-commerce market in the pandemic situation has driven parcel delivery companies' earnings sharply higher. Last year, Logen posted a 24% surge in operating profit at 29.2 billion won from a year earlier, with revenue swelling by 16% to 512.8 billion won.

Dae Myung, established by accountant Kwon Oh-il in 2010, focuses on clothing distribution. It has been growing through acquisitions, with its businesses ranging from electronics and chemicals to real estate. Last year, it earned 149 billion won in operating profit on sales of 1.33 trillion won on a consolidated basis.