China’s leading supply chain solutions and logistics service provider Best Inc. announced on Friday, October 29 that it has agreed to sell its express delivery business to J&T Express Co. Ltd., a PRC limited liability company in China. The transaction will have an estimated enterprise value of 6.8 billion Yuan or $1.06 billion.
However, the considerations to be paid as part of the deal will be subject to adjustments and requirements under the terms of a definitive agreement negotiated by both companies. The logistics firm expects to receive approximately $600 million in net value from the transaction.
Commenting on the decision, Best Inc.’s Founder, Chairman and Chief Executive Officer Johnny Chou stated that the sale will assist the company to focus more on its central operations in the logistics business.
“In light of the unexpected ongoing challenges from COVID-19 and evolving industry dynamics, we believe this transaction allows us to better capitalize on our strengths by focusing on supply chain-based logistics solutions and providing integrated supply chain, freight and global logistics services to our customers,” he stated.
Moreover, the company is endeavouring to improve its balance sheet and develop a better framework for profitability through the sale of its express business. Nevertheless, the sale will not include any of Best Inc.’s other ventures such as Supply Chain Management, Freight, Ucargo and Global.
The sale comes in light of Best Inc’s bid to hone its service offerings around the company’s core competencies, which it predicts will drive enhanced customer service and satisfaction, expand career development opportunities for employees, and maximize value for Best Inc’s shareholders.