AC Logistics acquires a 60% stake in Air21 for P6-B
The purchase was made by AC Logistics Holdings Corporation (ACL), which is a wholly-owned subsidiary of AC Logistics [AC 880.00 0.34%]. This is not the same company as AyalaLand Logistics Holdings Corporation [ALLHC 5.50 1.08%], which is actually a subsidiary of Ayala Land [ALI 37.95 2.57%].
The ACL subsidiary purchased a 60% stake in Alberto Lina’s Air21 Group for P6 billion, through an undisclosed combination of both primary (newly issued shares) and secondary shares (from Mr. Lina and other existing shareholders). According to Iris Gonzales of the Philippine Star, the move turbo-charges ACL’s organic logistics expansion by instantly stapling Air21’s national footprint on to its existing coverage, and it provides Mr. Lina with a great deal of potential organizational value for the remaining 40% of Air21 that is held by Mr. Lina and others by way of the “Ayala’s management prowess”.
MB BOTTOM-LINE
I’ve been saying this for a long time now, but the logistics game is the hottest industry in the market right now. The major players and families in the Philippine economy are desperate to grow their subsidiaries in this sector, but have had to come to grips with the reality that all of the largest logistics firms are privately owned by non-oligarch families with a great deal of operational know-how. “Logistics” is a huge business that covers everything from cold storages, to warehouses, to trucking, to last-mile delivery, to customs brokerages, to international routing, to inter-island deliveries, and up until recently, all of these niche sub-sectors had been completely ignored by the PSE titans for other opportunities that appeared more profitable at the time.
Now that the logistics sector has continued its decade-long surge in demand and profitability, the titans are finally starting to see that it’s not possible to compete through organic growth: they’ve got to buy into the existing logistics companies to get some skin in this game. Mr. Lina is a well-connected early beneficiary of this trend, but there will be many others to follow as the titans try to catch a piece of this market.
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Merkado Barkada's opinions are provided for informational purposes only, and should not be considered a recommendation to buy or sell any particular stock. These daily articles are not updated with new information, so each investor must do his or her own due diligence before trading, as the facts and figures in each particular article may have changed.
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