Introduction

We are pleased to share with you a summary update of market valuations and activities in the Asia Pacific logistics industry for the first half of 2020.

Logistics is one of the key sectors which Armor specializes in and closely follows market trends. Please contact us for further discussions.

Valuations of Asia Pacific’s public companies were lower over the last two quarters ending June 2020. EBITDA multiples were over 17.7% lower by the end of Q2-2020 (10.7x in Q2-2020 vs 13.0x in Q2-2019).

Based on 90-100 selected companies, the table above illustrates that industry returns are on a downturn, while companies’ margins have been stable over the past five years. Leverage ratios indicate improved financial positions over the past few years.

While H2-2019 were characterized by smaller sized transactions, H1-2020 saw significantly sized deals, pushing up the total transaction volume. Although we observed a smaller M&A deal count in H1-2020, the total transaction value is higher in H1-2020 vs H1-2019.

Armor selected the largest M&A transactions across the region in H1-2020 for which information on implied enterprise value (EV) was available. The median EV/revenue multiple that investors paid was 1.5x.