North American pension fund managing company invests in fast-growing third party logistics provider to drive the next phase of growth and expand scale of operations.
20 Oct 2016 | 9042 Views | By Autocar Professional Bureau
TVS Logistics Services Ltd (TVS LSL), the India-based multinational third-party logistics service provider, has announced that it has reached an agreement with Caisse de dépôt et placement du Québec (CDPQ), one of North America’s largest pension fund managers.
Under this agreement, CDPQ will invest over Rs 980 crore (US$155 ...
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TVS Logistics Services Ltd (TVS LSL), the India-based multinational third-party logistics service provider, has announced that it has reached an agreement with Caisse de dépôt et placement du Québec (CDPQ), one of North America’s largest pension fund managers.
Under this agreement, CDPQ will invest over Rs 980 crore (US$155 million) to acquire a sizeable minority stake in TVS LSL, which is a privately held subsidiary of the TVS Group.
CDPQ is ready to commit significant additional capital to finance transformative acquisitions and support TVS LSL’s expansion in India and globally. As a result of this investment, current investors Goldman Sachs and KKR will fully exit the company. CDPQ will purchase most of their joint stake, while TVS family members and management will acquire the remainder. The transaction is subject to the approval by respective boards and by the Competition Commission of India (CCI).
Talking about the investment, R. Dinesh, managing director, TVS Logistics Services, said, “We are happy to have CDPQ, a leading global institutional asset manager, on board. Over the years, we have benefitted from a meaningful partnership with global investors like Goldman Sachs and KKR. We believe CDPQ is the perfect long-term partner for our next phase of growth as we look to expand the scale of our business. TVS Logistics, over the years, has grown at a CAGR of more than 30% and has a strong global track record of growth, both organically and through acquisitions. We look forward to continuing this evolution and building on our successes through a fruitful partnership with CDPQ.”
Michael Sabia, president and CEO, CDPQ, said, “Efficiency in delivering goods to customers is a key driver of business performance. TVS Logistics is well positioned to seize growth opportunities resulting from recent tax reforms in India and global demand for state-of-the-art logistics services. CDPQ’s strategy is to identify world-class management teams and to support them over the long term. This is precisely what we intend to do with TVS Logistics as it expands in its home market and abroad.”
Over the past few years, TVS LSL has substantially widened its service capabilities, including last-mile delivery, demand forecasting, and technology logistics through its acquisitions in the UK such as Rico Logistics and Multipart. It further added capabilities like sub-assembly and sequencing through its Wainwright acquisition in the US. With a global footprint and suite of sophisticated capabilities and services, TVS LSL says it is now well positioned to increase its coverage across all segments of the logistics supply chain in India and other parts of Asia.
TVS LSL has a significant presence in the UK and in the USA. Its UK business has grown sevenfold in the last five years from £40 million (Rs 393 crore) to £275 million (Rs 2,705 crore). It is also one of the largest Indian employers in Northern England with more than 3,500 employees in the UK and in Europe. In the USA, it operates through seven facilities with over 800 employees. CDPQ has opened its India opened in Delhi in March this year looking at investment opportunities in the South Asian markets.