Leading global private equity firm CVC Capital Partners (CVC) is investing P6 billion to Fast Group (Fast), the Philippines leading end-to-end logistics player, to further boost Fast’s continued development and further expansion across the country.
Brice Cu, CVC Capital Partners managing director, revealed its infusion through CVC Capital Partners Asia IV at today’s formal announcement by Fast of the partnership. CVC now owns 40 percent of the partnership.
“We are committed to invest P6 billion. We are pleased to finalize our partnership with Fast. We made the right choice,” said Cu, noting CVC has been working closely with Fast since 2019. He cited within a year’s time, the business has made excellent progress on a number of important strategic initiatives in digital transformation, automation of its processes, and most notably in building a pipeline of attractive acquisition opportunities.
In choosing Fast, Cu said there are three key things they looked in investing in a business – equity investment, strong management team, and industry prospects. He said all these three boxes have been ticked off and that Fast is positioned for further growth and even a potential IPO in the future. At present, CVC is talking to a handful of business as candidates for potential mergers and acquisitions. Fast is the third Philippine business that CVC has invested into.
William Chiongbian II, Group President and CEO of Fast Group cited CVC as both a strategic and a financial partner and both partners have been working smoothly.
“Fast is the market leader in the growing Philippine logistics sector, our clients greatly value our broad offering which spans the entire supply chain from logistics and warehousing, to distribution and transportation,” he said.
“The investment in Fast by CVC is a testament to the attractiveness and potential of the Philippine logistics sector, the market leading business we have built over the last four decades, and of course the economy more broadly. We are delighted to be partnering with such an experienced investor as we now seek to accelerate our growth.”
Bonifacio Doroy, FastGgroup director, said the CVC investment will accelerate the growth of Fast with the expansion of its present facilities, transform its processes digitally with new technology and other opportunities for mergers and acquisitions.
Despite the pandemic this year, Doroy said that Fast is expected to end the year with 12 percent growth in revenues as customers engage in the pharmaceutical, food and home essential products continued unhampered operations during the lockdowns. He said that Fast is expected to definitely grow even better double-digit next year as the economy further opens up. In 2019, Doroy said, Fast registered $400 million in sales turnover.
Chiongbian said that as economy opened up, inventories are going back to their pre-COVID levels.
As the country’s largest end-to-end logistics company, Fast employs more than 11,000 workers, over 2,500 in transport fleet of various trucks and more than 400 accredited sub-contractors. It has also the biggest footprints in terms of warehouses of 1.2 million square meters and more than 90,000 points of sales and distribution points across the country.
To make their operations more efficient and allow them to do a better job, Ronald Dompor, FastGroup executive vice-president, said they are investing in a trucking technology to monitor movements as well as an extensive sales force automation that covers more than 90,000 outlets of its sales and distribution business.
Throughout 47 years, Fast has served enterprises of all sizes from the largest multinational companies and Filipino conglomerates to tens of thousands of sari-sari stores and neighborhood groceries. Today, the Group is present in transport logistics, warehouse management, selling distribution, toll manufacturing, and value-adding supply chain services.
Founded by the Chiongbian Family, Fast has been steadily growing for over four decades, from its roots in William Lines in the 1970s, became a publicly listed shipping company in the 1990s, and on to becoming a leader in end-to-end logistics.
The business delivers supply chain solutions that meet the world-class standards and requirements of multinationals and large organizations operating in the Philippines, while at the same time nurturing its strong roots with the local communities in which the business operates.
Meanwhile, CVC is a leading global private equity company, with a long track record of building businesses in Asia, having been active in the region for over 20 years. This deep experience will be essential in accelerating Fast’s growth and increasing its footprint through mergers and acquisitions, and in the digitalization of its logistics operations through investments in technology.
CVC is a leading private equity and investment advisory firm. Founded in 1981, CVC today has a network of 23 offices and over 550 employees throughout Europe, Asia and the US. To date, CVC has secured commitments of in excess of US$160 billion from some of the world's leading institutional investors across its private equity and credit strategies. In total, CVC currently manages approximately $109 billion of assets. Today, funds managed or advised by CVC are invested in over 85 companies worldwide, employing over 400,000 people in numerous countries. Together, these companies have combined annual sales of approximately $93 billion.
CVC has one of the largest and longest-established pan-regional office networks of any private equity business in Asia and has been active in the region since 1999. CVC's Asia private equity strategy is focused on control and partnership investments in high quality businesses, typically with enterprise values between $250 million and $1.5 billion.