Merrill Lynch may exit A S Cargo

Blackstone may step in; valuation at Rs 800 cr

Merrill Lynch, the global financial powerhouse, is understood to be exiting Bangalore-based A S Group of

Companies, which is an integrated infrastructure service provider. Blackstone, another global private equity giant is understood to be looking to buy into this company which has a topline of Rs 350 crore and a debt of around Rs 150 crore.

According to investment bankers close to A S Cargo, Merrill Lynch is understood to be looking at a valuation of Rs 800 crore for the exit. Bankers further add that in addition to Blackstone, Coffee Day Holdings may be another suitor to pick up interest in this company.

A S Cargo is among the largest warehousing company in South India and has an active client base of 120 including Hindustan Unilever, Nestle, Britannia, ITC, Pepsi, Bosch, Hyundai, Dell, Mercedes, Ford besides others. The company operates in Road & Rail Transportation, warehousing/industrial infrastructure creation, Integrated Warehouse Management besides Sales & Distribution.

According to investment bankers close to A S Group, Merrill Lynch had invested in A S Carriers, an arm of the Group, which has completed 1.2 million square feet of warehousing space and which is expected to be scaled up to 2.5 million square feet in the near future. The management of A S Group of Companies declined to comment.

In addition to having an investment in A S Cargo, Merrill Lynch has invested around Rs 400 crore in DRS Group, a Hyderabad-based logistics player. If the investment from Blackstone into A S Group of Companies, it will be Blackstone’s third investment in logistics space in India. Blackstone has already invested $81 million in Allcargo and another $68 million in Gateway Rail.

Blackstone has so far invested $1.25 billion (around Rs 5,600 crore) in 12 Indian companies. It recently secured a 12.5 per cent stake in Monnet Power Company for $60 million (Rs 275 crore). It also has investments in Indian companies like newspaper firm Jagran Prakashan, garment maker Gokaldas Exports, Nagarjuna Construction and Emcure Pharmaceuticals.