Turkey’s Netlog to meet with potential investors soon over stake sale

Netlog hired U.S. bank Citi last year to look at various options and is planning to enter formal negotiations with potential investors by the end of the summer, Gökalp Çak, vice chairman of the firm, said.

“Meetings with potential investors are likely to begin at the end of August,” Çak told Reuters in an interview.

Private equity funds and investment banks were among the parties interested in buying a stake in the company, which has an estimated value of more than $700 million, Çak said.

“We’re looking for a partner that could properly assess the value of the company and want to tap their expertise to further expand.”

Netlog mainly operates in warehousing and distribution of food items, fashion and lifestyle, pharmaceuticals and general industrial goods.

The size of the stake to put up for sale is not yet clear but the family will keep control of the firm.

The company, established by Çak’s father, has seen sales grow by at least 25 percent every year since 2009.

In 2014, annual sales were 1.6 billion lira ($616 million), producing earnings before interest, tax, depreciation and amortization of 126 million lira. It has about 7,000 employees.

“We would either stay as a niche firm operating in the Turkish market, or would expand to operate at a broader regional level to draw in global customers,” Çak said, explaining why the company decided to buy Belgian warehousing and distribution firms Belspeed and TNT Fashion in 2013 and 2014.

These purchases allowed Netlog to offer services across Europe, the Middle East, North Africa and central Asian countries. It has warehouses in Britain, the Netherlands, Belgium, Dubai and Turkey, Çak said.
“Now I can come out and pitch for hub-and-spoke operations of bigger companies for the region.”

If the stake sale goes ahead, it would be the latest in a string of foreign deals in Turkey that accelerated in May.

Early this month, French dairy producer Lactalis bought 80 percent of Turkish dairy producer Ak Gıda with an estimated market value of $1 billion. German food distribution platform Delivery Hero bought Turkish online food distributor Yemeksepeti in a deal worth $589 million.