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Allcargo Logistics said that it has, through its European subsidiary -- Ecu Line -- acquired a US based logistics company, Econocaribe Consolidators, for about $50 million.
The company said that it will not be able to disclose the exact deal value as it is planning another acquisition in the near future, albeit of a smaller size. The future acquisition will be of a company having its operations in Europe and Australia.
Allcargo said that the Econocaribe acquisition will strengthen and increase presence in the US market. This is the seventh overall acquisition for Allcargo Logistics.
“With this acquisition, we expect to add a lot more customers in and out of the US, where we were not present earlier,” said Shashi Kiran Shetty, Executive Chairman, Allcargo Logistics Limited.
Econocaribe Consolidators is the third largest Non Vessel Operating Common Carrier (NVOCC) in the US. An NVOCC does not own a vessel but acts as a carrier by buying space on ships.
“Econocaribe is a zero-debt company and grew at 15 per cent last year,” Shetty said.
All the employees of Econocaribe will be absorbed by Belgium-based Ecu Line.
The deal will be funded by loans raised in Belgium (at an interest rate of 3 per cent) and from internal accruals of Ecu Line, the company said.
It said that the acquisition will start adding to the earnings immediately.
Shares of Allcargo closed higher by 10.64 per cent at Rs 99.30 on the Bombay Stock Exchange.
satyanarayan.iyer@thehindu.co.in
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