Anyone jumping on this?Silk Logistics Holdings ('Silk'or the'Company') is a leading Australian-owned logistics business providing an integrated 'port-to-door' service to some of the world's best-known brands.
Established in 2014 through a management buyout ('MBO') led by a team including Brendan Boyd, Managing Director, and John Sood, Chief Customer Officer, Silk provides time certain, specialised, port-to-door logistics through two primary divisions and three distinct services as depicted below:
Silk differentiates itself in the market by blending its physical logistics capabilities and scaled national footprint with predictive insights capability, inventory optimisation and supply chain visibility from wharf to warehouse and through to last mile distribution.
Offer Snapshot
- Unique opportunity to invest in ahigh quality 'port to door' integrated logistics servicesbusiness with strongcustomer focus
- Founder-led businesswith strong alignment with incoming investors,founders retaining approximately c28% of the listed entity.
- Proven management team, growing revenues from ~$80m in FY13 to $316.1m in FY21F, representing a 18.7% CAGR.
- Aspiration todouble revenues to >$650mover the next 5 years through organic and targeted select acquisitive growth.
- Asset lite business model, with ROCE >40% and cash conversion >70% in FY22F.
- Highlydiversified blue-chip customerbase with no one customer representing >5% of revenues.
- Organic growth opportunitiesthrough increased customer share of wallet and consolidation of existing properties.
- Identified acquisitionsin port logistics in Perth and Adelaide to build out national offering and provide ability to service major blue-chip customers.
- Fragmented competitive landscape -competitors operating sub-scale (geography and services) providing opportunity to capture greater market share
- Significantcompetitive moatthrough scale, compliance, IT integration and environmental sustainability.
Company Highlights
- Vertically integrated national logistics servicebusiness model with atrack record of capturing significant growth and margin opportunitiesfrom providing multiple services for customers across multiple regions
- Three main operating divisions
- Port Logistics - 3rd largest port logistics business nationally, import/export container cartage, 400k container movements pa
- Warehousing and Handling - fully customised storage / handling services across 19 sites and 330,000 sqm, multi-user, high occupancy, contract business
- Distribution - bespoke distribution service offering, moving over 5 million pallets p.a.
- Favourable underlying industry drivers, supported by strong import/export volumes, rapidly growing e-commerce growth and trend from customers moving to large logistics service providers with 'port-to-door' service offerings
- Strategically located operations in all major Australian capital cities, typically with good access to major ports and major transport hubs nationally
- Long standing, diversified blue chip customer base with tenure 2x+ industry norms, low customer concentration and operating in staple sectors that are growing
- Track record of strong financial performance since MBO in 2014 at revenue and earnings level - driven by strong underlying organic growth (circa 10% CAGR) and strategic acquisitions
- Capital-lite business model and strong visibility of earnings (~75% of warehouse revenues contracted; high degree of repeat/recurring revenue)
- Strong, stable, experienced, and passionate management team with a cohesive and high performance culture and strong safety track record
Key Offer Details Offer
1 Offer Price (per share) $2.00
2 Total Proceeds of the Offer $70.0 million
3 Total number of Shares on issue at Completion of the Offer 75,761,963
4 Total number of Shares available under the Offer (excluding TOR SaleCo) 5,000,001
5 Total Number of Shares available under the TOR Offer 30,000,000
6 Indicative market capitalisation (at the Offer Price) $151.5 million
7 Pro forma Net Debt / FY21 pro forma EBITDA (pre AASB16) 0.6x
8 Pro forma Net Debt (as at 31 December 2020) $13.4 million
9 Enterprise Value as at Completion of the Offer1 $166.8 million
