* Goodpack says in talks with one party on possible
* Goodpack shares are up 25 pct this year
* Australia's Brambles ended talks in March to buy Goodpack
* DBS says offer price could be in S$2.50-S$2.80 per share
(Adds details of Goodpack statement, closing share price)
By Stephen Aldred
HONG KONG, May 19 KKR & Co is nearing a
deal to buy Singapore's Goodpack Ltd, the world's
largest maker of intermediate bulk containers which has a market
value of S$1.36 billion ($1.1 billion), sources with direct
knowledge of the matter said.
If successful, the purchase would be the first of a listed
company from KKR's latest Asia fund, which raised $6 billion.
The proposed deal would give KKR access to a niche business,
with a global network and supply chain management that is hard
to replicate, DBS Group said in a research note.
The U.S. private equity firm is working with at least two
investment banks on a debt package to buy Goodpack, the sources
said. KKR has been in discussions to buy Goodpack for nearly a
year, but talks are now at an advanced stage, they said, adding
that there was no guarantee a deal would be clinched.
Goodpack said in March it had been in discussions with
unnamed parties which might lead to a buyout of the company, and
hired Rippledot Capital to advise on the process.
Goodpack, which makes containers used in the rubber, tyre
and food industries, had attracted interest from private equity
firms Blackstone Group and Carlyle Group, Reuters
previously reported. In March, Australian pallet maker Brambles
Ltd said it had ended talks to buy Goodpack.
The DBS research note last week said that an offer could
range from S$2.50 to S$2.80 per share assuming price to earnings
ratio of 17 to 19 times. That would value Goodpack at as much as
On Monday, Goodpack shares closed up 0.8 percent at S$2.47,
while the Straits Times Index was flat. The stock is up
around 25 percent so far this year, far outpacing a 3.1 percent
rise in the benchmark index.
Goodpack's founder David Lam controls around 32 percent of
the company. KKR's Southeast Asia head Ming Lu is leading the
transaction for the private equity firm, one of the sources
The financing package is expected to feature leverage of as
much as six times earnings before interest, tax, depreciation
and amortisation (EBITDA), or around $600 million, the sources
Goodpack on Monday issued a statement confirming that it is
in discussions with one party, without naming the potential
"Discussions are still on-going and there is no certainty
whatsoever that these discussions will result in any
transaction," the statement said.
KKR declined to comment. The sources declined to be
identified as the discussions are confidential.
Goodpack specializes in environmentally friendly
intermediate bulk containers (IBCs) that could replace wooden
boxes and metal drums widely used in bulk cargo today. The firm
operates the world's largest fleet of steel IBCs, which are
leased to companies operating in the rubber and tyre, food and
Interest in the company comes as private equity M&A in Asia
had its strongest start to the year since 2011, with
first-quarter volume up 48 percent on year to $9.4 billion,
Thomson Reuters data show.
The company previously hired Macquarie Group as it
eyed a possible sale in 2008, and Brambles and packaging company
Loscam Ltd were reported as possible suitors at that time. [link.reuters.com/qet28v
($1 = 1.2507 Singapore Dollars)
(Additional reporting by Rujun Shen in SINGAPORE; Editing by
Denny Thomas and Muralikumar Anantharaman)