Best Inc, a Chinese logistics company backed by Alibaba Group, is launching a U.S. IPO that is seeking as much as 2 million to fund an expansion of its logistics and supply chain network, develop new technology and open more convenience stores.
The company, led by Johnny Chou, a former greater China president for Alphabet Inc's Google, plans to get listed on the New York Stock Exchange. The IPO will be equivalent to 16.4 percent of the company's enlarged share capital.
China is the world's biggest logistics market, notching up .6 trillion in annual revenue in 2016, with demand for express delivery services expected to jump 17.9 percent annually in the six years to 2021, Best said, citing forecasts from consulting firm iResearch.
The offering will include an issue of 53.56 million new American Depositary Shares (ADS), each representing one class A ordinary share, in an indicative range of to each, according to a filing with the U.S. Securities and Exchange Commission on Wednesday.
Existing shareholders, including private equity firms CDH Investments, China Renaissance Capital, State-owned Everbright Financial Holding and a unit of Goldman Sachs Group Inc, are selling another 8.54 million ADSs.
Chou is offering 1 million shares, while his brother George Chou, the company's chief strategy and investment officer, is selling 250,000 shares.
Best follows a number of Chinese logistics companies in going public. They include SF Holding, YTO Express and STO Express, which listed in the Chinese markets, and ZTO Express, which raised .4 billion with a New York listing in October.
Best is offering shares at a 2019 forecast price-to-earnings (P/E) ratio of 17.7 to 20.4 times, according to a term sheet seen by Reuters, compared with 13.7 times for ZTO.
P/E ratios tend to be higher in China and SF Holding trades at 35.3 times while YTO trades at 21.7 times.
The IPO is set to be priced on September 19 and its market debut is set for the following day.
The company plans to use 0 million to expand its convenience stores and its logistics and supply chain services, with another 0 million set aside for technology investments. The remainder will be used for general corporate purposes and potential acquisitions.
CITIC CLSA, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, JP Morgan, KeyBanc Capital Markets, Oppenheimer & Co and Stifel were hired as underwriters.