The ZTO IPO will is likely to overshadow Alibaba Group Holdings 2014 IPO.
Alibaba Group Holding’s splash in the e-commerce IPO market is set to be dwarfed by ZTO Express, a Chinese Logistics company which is set to launch the largest IPO in the U.S. to date.
Later this month ZTO is scheduled to come out with an IPO which is expected to raise $1.5 billion, the latest example of a Chinese company seeking to capitalize on growing western lures while trying to avoid red tape typically found in mainland China.
ZTO has cited iResearch’s data saying China is the world’s biggest express delivery market with 21 billion parcels delivered in 2015. This makes the Chinese market nearly 1.5 times bigger, in total parcel volumes, than its U.S. equivalent.
In its regulatory filing, ZTO has stated it expects to sell 72.1 million American depositary shares in the range of $16.50 to $18.50.
According to sources close to ZTO, the company has been eyeing a U.S. listing to bring about a faster completion and make it easier for its shareholders to monetize their stakes.
In 2015, a consortium of companies including Warburg Pincus LLC and Hongkong based Hillhouse Capital Management Ltd had invested in ZTO.
In China, ZTO, which was founded in 2002, delivers parcels for JD.com and for Alibaba. As per its IPO prospectus, it delivered nearly 14% of all parcels in China. It is a major player in China.
ZTO plans on utilizing the proceeds from the IPO for buying more trucks, expand its capacity by acquiring lands, equipment and facilities and other general corporate purposes.
ZTO intends to list its shares in the New York Stock Exchange (NYSE) under the ticker ZTO.
Morgan Stanley (MS.N) and Goldman Sachs Group Inc (GS.N) are the lead IPO underwriters.
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