Affinity exits pallet maker for A$650m

The Hong Kong-based firm has sold its stake in Australia's Loscam to China Merchants Group.

Pan-Asian investor Affinity Equity Partners has sold its stake in Australian pallet maker Loscam to Hong Kong-based China Merchants Group. The sale was priced somewhere between A$650million (€437 million; $548 million) and A$670 million according to a source close to the deal.

Loscam is a pallet pooling company with operations in Australia and other Asian countries including Thailand, Indonesia, Singapore, the Philippines, Hong Kong, Vietnam, Malaysia and China. It is the second largest pallet-maker in Australia with almost 10 million pallets on hire.

Affinity bought its 80 percent stake in the company in 2005 in a secondary buyout from DB Capital Partners, the private equity arm of Deutsche Asset Management. The investment was priced between A$250 million and A$260 million.

The remaining 20 percent was held by the Loscam management team. Under the terms of this recent transaction, the existing management will retain their equity stake in the business.

Earlier this year, Affinity hired Credit Suisse and Deutsche Bank ahead of a prospective public listing of Loscam. The firm was invited bids for the company. Australian private equity firms CHAMP and Pacific Equity Partners were both reportedly bidders in the auction at one time.

Affinity Equity Partners is currently investing from Affinity Asia Pacific Fund III, which closed on US$2.8 billion in 2007. As of October 2009, the fund was 50 percent invested. The firm has offices in Hong Kong, Seoul, Singapore, Sydney and Jakarta.