The company is reviewing around 10 acquisition opportunities, and is now in advanced discussions for three of them, he said.
It will look to acquire targets with accumulated revenue of USD 500m-USD 1bn, he said. It hopes to almost double total revenue to USD 3bn prior to a potential initial public offering (IPO) by 2025 from the current USD 1.8bn, he continued, adding that it could hit a revenue of over USD 2bn this year.
In March this year, the logistics service provider acquired Netherlands-based rival Fast Forward Freight for an undisclosed price tag. The deal gave EV Cargo an over USD 170m revenue injection and doubled its air freight activities to over 100m kilograms, as announced.
EV Cargo will prefer taking control of potential targets in mainland China, Southeast Asia or the US this year, he said.
It plans to explore a potential market entry into the US and expects one-third of its supply chains business to derive from Asia into the US in the coming three years, he said. Currently, the Asia-Europe operation accounts for two thirds of total revenue with the rest coming from the domestic business in the UK and western Europe, he added.
The company is focusing on acquiring targets such as freight forwarders, customs brokerage, cross-border ecommerce and related software-technology businesses, he said.
Target companies with an average EBITDA of USD 10m-USD 30m are preferred, he said, adding that industry players usually involved trade sale at between 12x and 16x EV/EBITDA multiples.
EV Cargo also takes environmental, social, and corporate governance (ESG) considerations into account when tabling up value creation strategies for acquisitions, he noted.
Favours exit via IPO
EV Cargo is planning to launch a potential IPO for shareholder exit in three years and is no longer interested in the dual track exit plan, said Zarin, who is also the founder, Chairman and CEO of EmergeVest. New York, London and Hong Kong are among the potential listing venues, referring to Mergermarket's previous report.
JPMorgan is currently the sole financial advisor to help assist with the potential transaction, he said.
Aside from its revenue ambitions, EV Cargo also hopes to be one of the top 20 global third-party logistics service providers ahead of the potential listing, given that it is now among the top 50 players, he continued.
Created by EmergeVest in 2018, EV Cargo offers freight forwarding, supply chain and technology services. It enables retailers to monitor a united supply chain network, and design, build, test and deploy optimum supply chain management systems for its clients, he said.
The company recorded a gross merchandise volume (GMV) of USD 32bn in 2021, with a footprint across 25 countries among western Europe and Asia, he said. It is targeting GMV to surge over 10% every year with its organic growth, he further said.
EmergeVest, which was established in 2013 and focuses on supply chain, technology and financial service investments, manages an asset under management (AUM) of USD 860m via four investment vehicles and two family office-structured funds, he said.
by Eva Ng and Jessica Wong in Hong Kong
Source: Mergermarket