China-focused private equity firm Nexus Point has led a consortium to acquire a majority stake in Hong Kong-based logistics company Honor Lane Shipping (HLS), according to the latter’s financial advisor BDA Partners.
The selling shareholders will remain in the business of HLS, BDA Partners said in a statement.
Founded in in 1997, HLS is a non-vessel-operating common carrier (NVOCC), providing sea freight forwarding, air freight forwarding, and other value-added services to facilitate shipments across the globe.
BDA Partners said HLS was ranked as one of the largest NVOCCs in the Asia-US trade lane in terms of volume.
The company operates offices across Asia and in the US, with a strong presence in Greater China and Southeast Asia.
Vincent Chan, president of HLS, said the partnership with Nexus Point will strengthen the company’s offering in other markets including Europe, Oceania, and Latin America. HLS is also expanding its air freight capabilities, and ramping up digital transformation, according to Chan.
Nexus Point scouts for control opportunities in Greater China across the consumer, healthcare, business services, and manufacturing/industrials sectors.
“Our investment strategy centers around identifying companies with robust operating fundamentals, defensible market positions, and sustainable competitive advantages,” KC Kung, founder and managing partner of the PE firm, said in the statement.
Kung was a former MBK Partners executive before he established Nexus Point in 2017.
In 2019, the firm raised $475 million for its middle-market buyout fund.
Nexus Point’s portfolio includes Burger King Taiwan, homecare medical services company Jumao, dental clinic chain Jinsong Dental, plastic packaging firm Sanying respiratory packaging, consumables manufacturer GaleMed, event solutions provider GL events in China, and B2B dental supplies marketplace Lichi Medical Technology.
“In China today, there are a large number of attractive mid-market control targets, yet the competition for such deals is very limited, leading to very reasonable entry valuations,” Kung wrote in a note on his firm’s website in April.
He added that the seven investments of the firm were secured at under 10x EBITDA on average.
“Our portfolio has achieved an average EBITDA CAGR of over 25% since our investment,” he said.
To date, Nexus Point has managed over $1 billion in assets under management, Kung wrote in a separate note last month.