CDPQ (Caisse de depot du Quebec), a Canada-based pension-fund manager, will invest ₹1,000 crore to acquire a ‘sizeable’ minority stake in TVS Logistics by buying out existing investors Goldman Sachs and KKR.
CDPQ will purchase most of the two investors’ joint equity stake in TVS Logistics, while TVS family members and management have invested nearly ₹200 crore to acquire the remainder, said R Dinesh, Managing Director, TVS Logistics. No money will come to the company through this deal as it was between CDPQ and the investors, he said.
However, over and above its investment, CDPQ is ready to commit significant additional capital to finance growth and acquisitions, Dinesh told newspersons, without giving details on the equity-stake purchase or shareholding after this transaction.
Goldman Sachs invested ₹125 crore in TVS Logistics in 2008, while KKR came on board with an investment of ₹250 crore in 2012.
Dinesh said the company had done many acquisitions for capabilities and knowledge.
However, henceforth, any acquisition will be for growth and about customers in new areas such as defence, in which the company has a significant presence in the UK.
“From now on, it will be all about scale and expansion.”
CDPQ is a long-term partner for the company’s next phase of growth. Over the years TVS Logistics has grown at a CAGR of over 30 per cent, and has a strong global track record of growth, both organically and through acquisition. “We look forward to continuing this evolution and building on our successes through a fruitful partnership with CDPQ,” Dinesh said.
TVS Logistics, which has nearly 14,000 employees, will report a revenue of around ₹5,700 crore by the end of this year. “We would like to triple this in 3-5 years.” Its UK business has grown seven-fold in the last five years, to £275 million, he said.
Anita M George, Managing Director, South Asia, CDPQ, said the fund has invested in logistics companies in countries like Singapore. In India, this is the first investment in the logistics space, she said.
JM Financial Institutional Securities acted as exclusive financial advisor to Goldman Sachs and KKR, said a press release.