Fenway Partners-backed Preferred Freezer Services has entered a joint venture to build and operate cold chain logistics businesses throughout China. The company, which builds temperature controlled warehouses, has formed the joint venture with Sinotrans Limited, a logistics service provider in China, affiliates of Yang Ming Marine Transport Corporation, a Taiwanese global cargo services provider and the Yida Group, an urban design and real property developer.
Preferred Freezer Services (“Preferred Freezer”), a global leader in state-of-the-art temperature controlled warehouses, announced today that it has entered into a joint venture with Sinotrans Limited (“Sinotrans”), the leading logistics service provider in China, affiliates of Yang Ming Marine Transport Corporation (“Yang Ming”), a Taiwanese global cargo services provider, and the Yida Group (“Yida”), an urban design and real property developer. Together, they will jointly build and operate cold chain logistics businesses throughout China.
Preferred Freezer, which is majority owned by middle-market private equity firm Fenway Partners, has operated in China under a smaller joint venture since 2009. The new joint venture will leverage Preferred Freezer’s technology and refrigerated logistics expertise, and the local operating scale and capabilities of its strategic partners to address China’s rapidly growing demand for cold chain logistics services that is being driven by food safety issues and the dramatic expansion of the middle class.
“Today’s announcement represents an important step forward for our business,” said John Galiher, President and Chief Executive Officer of Preferred Freezer. “We believe that China’s cold chain logistics is still in its initial stages of development and through this strategic partnership with Sinotrans and Yang Ming, we will be well positioned to execute on significant growth opportunities and expand our footprint in the region. Importantly, our customer demand has experienced tremendous growth over the past few years and this joint venture provides Preferred Freezer with additional scale and local operating expertise to more effectively address their requirements in the Chinese market.”
Mr. Galiher concluded, “We are committed to being the leader of integrated cold chain warehousing and transportation solutions through a network of strategically located, state-of-the-art facilities in China, and believe that Sinotrans, Yang Ming and Yida are the ideal partners to help Preferred Freezer achieve this goal.”
Peter Lamm, Co-Founder and Managing Director of Fenway Partners, said, “This is a powerful development for Preferred Freezer and underscores Fenway’s confidence in the potential of the business. Sinotrans and Yang Ming have unparalleled regional experience in transportation and logistics solutions that will help Preferred Freezer to further expand its global footprint and brand recognition. The strategic joint venture allows Preferred Freezer to seize opportunities across the vast Chinese market. We stand firmly behind John and his team as the company enters its next stage of development.”
Tim McLellan, Managing Director of Preferred Freezer in China, commented, “We are excited to build our partnership with Sinotrans and Yang Ming which underscores our commitment to setting a higher-quality level and improving the reliability of China’s cold chain, and to increasing food safety awareness in the handling and distribution of temperature controlled foods. Both companies are world-class strategic partners. Sinotrans has a robust domestic logistics network and distribution capabilities that are essential for an integrated logistics platform, while Yang Ming will bring important experience in maritime transport services and value added logistics solutions.”
“We are excited to further our relationship with Preferred Freezer and look forward to working with John, Tim and the rest of their teams to better meet the growing demand for high-end cold storage warehousing and logistic solutions in China,” said Mr. Jianmin Yu, Vice-President of Sinotrans.
Mr. Cliff Pai, President of YES Logistics, an affiliate of Yang Ming, commented, “Preferred Freezer will be an important partner for our business as the company brings excellent experience in cold storage design, construction, operations and management. They are a recognized brand name and will add a unique and thoughtful perspective to this cooperation.”
Sinotrans, headquartered in Beijing, is the leading logistics service provider in the People’s Republic of China. Its principal businesses include freight forwarding and shipping agency, storage and terminal services, marine transportation and other services such as trucking transportation and express services. Leveraging its comprehensive service network, integrated logistics service model and professional expertise, Sinotrans provides a complete range of logistics services for its customers as their dedicated logistics partner.
Yang Ming, headquartered in Keelung, Taiwan, is principally engaged in the shipping business. The company operates its businesses primarily through the provision of domestic and overseas marine shipment service, domestic and overseas marine passenger service, warehouse, pier, tug boat, barge, container freight station and terminal operations, maintenance and repairs, chartering, sales and purchase of ships, maintenance and repairs, lease, sales and purchase of containers as well as chassis, shipping agency, as well as ocean freight forwarding service, among others. The company operates various ship routes, such as Asia-America, North America-South America, North America-Northwest Europe, Asia-Northwest Europe, Asia-Mediterranean, Asia-Black Sea, as well as intra-Asia, among others.
Completion of the transaction is subject to regulatory approval and customary closing conditions. Terms of the transaction were not disclosed.
About Preferred Freezer Services
Preferred Freezer Services is dedicated to designing, constructing and operating state-of-the-art temperature controlled warehouses throughout the United States and Asia. Preferred Freezer has grown from a single facility in 1989 to its current 35 locations, with four additional facilities currently under construction. Preferred Freezer Services operates in locations throughout the United States with facilities in New York/New Jersey, California, Florida, Georgia, Illinois, Massachusetts, Pennsylvania, Texas, Virginia as well as global locations in China and Vietnam.
About Fenway Partners
Fenway Partners is a middle market private equity firm based in New York with approximately $2.1 billion in originally committed capital. With significant knowledge and success investing in the branded consumer product and specialty distribution industries, Fenway has built a strong reputation for its hands on approach to supporting portfolio companies. For further information about Fenway Partners, please visit www.fenwaypartners.com.