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$310m-a-year Silk Contract Logistics taps two brokers for IPO

Sarah Thompson, Anthony Macdonald and Tim Boyd

Mar 30, 2021 – 9.34pm

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As private equity types ready final bids for Toll Global Express, there’s a different local logistics outfit keeping funds managers busy.

Silk Contract Logistics notched $251 million consolidated revenue in the 2020 fiscal year.

Street Talk understands Victorian-headquartered integrated logistics business Silk Contract Logistics has tapped brokers Morgans and Shaw and Partners to prepare it for life on the local bourse.

Sources told this column the two brokers had launched a non-deal roadshow this week to introduce Silk and its management team to fund managers, ahead of a run at the ASX before June.

Silk was being pitched to funds as a port-to-door logistics solution, which can take freight off big cargo ships, store it in warehouses and then distribute it.

The group notched $251 million consolidated revenue in the 2020 fiscal year compared to $195 million in fiscal 2019, according to accounts lodged with the corporate regulator.

Funds were told that revenue figure was forecast to hit $310 million in the 12 months to June 30 this year, while earnings before interest and tax was pegged at $17.8 million.

Silk is expected to seek to raise $100 million for its IPO.

The company was formed via the merger of Kagan Logistics and Hoffmann Transport in 2012, and was owned by the now-defunct Gresham Private Equity. In 2014, Silk’s management team teamed up with Rich Lister Tony Gandel’s Gandel Invest to buy the business from Gresham. The management team subsequently bought out Gandel Invest.

It is understood chief executive officer Brendan Boyd and chief customer officer John Sood owned about half of Silk but were not planning on selling down their stakes in the IPO.

Silk and its brokers planned to get a pathfinder prospectus to cornerstone investors around the end of April/early May, and would launch the deal more broadly once cornerstone support had been locked in.

Sarah Thompson has co-edited Street Talk since 2009, specialising in private equity, investment banking, M&A and equity capital markets stories. Prior to that, she spent 10 years in London as a markets and M&A reporter at Bloomberg and Dow Jones. Email Sarah at sarah.thompson@afr.com

Anthony Macdonald is a Chanticleer columnist. He is a former Street Talk co-editor and has 10 years' experience as a business journalist and worked at PwC, auditing and advising financial services companies. Connect with Anthony on Twitter. Email Anthony at a.macdonald@afr.com

Tim Boyd is a journalist, based in Sydney, who writes for the Street Talk column. Connect with Tim on Twitter. Email Tim at tim.boyd@afr.com

$310m-a-year Silk Contract Logistics taps two brokers for IPO

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