TVS Logistics today announced the acquisition of UK-based Rico Logistics. The acquisition will help the company to achieve its target of $1 billion turnover by 2015 and will add new verticals. Total cost of acquisition, both primary and secondary, will be around Rs 100 crore.
R Dinesh, managing director, TVS Logistics said that the company has been looking at inorganic growth as part of its growth plan. This is the third acquisition by TVS Logistics in UK.
The acquisition was funded through KKR fund (which invested Rs 265 crore in January 2012) and internal accruals.
Traditionally TVS Logistics has been focussed on auto sector, this acquisition will add new verticals including IT&Telecom and equipment products.
The Rs 400 crore Rico Logistics will also bring IT capability and will help the company to offer new solutions for Indian and other Asian customers, said Dinesh.
S Ravichandran, executive director, TVS Logistics said that there are multiple synergies within the business in Europe and in India which will allow us to scale ip Rico business globally.
He added, customer and capability are part of the acquisition the company always look for.
Sanjive Sharma, MD, Rico Logistics said the acquisition will help the company to have more financial stability and this give Rico potential of expanding its offering across Europe and the globe, with TVS Logistics as a major partner, who has both the credibility and financial standing.
On TVS Logistics outlook, Dinesh said while the logistics industry reported by around two%, TVS Logistics grew by around 10-15%.
"At present our turnover is around Rs 2,500 crore, though it was not as high as we expected because of the market," said Dinesh.
He added, the company is confident that it will reach the $1 billion turnover target by 2015 and inorganic growth is part of the growth plan.
"By March we will announce few more acquisitions and all the acquisitions we have done till now are profitable," he said.
The company will look at further consolidating its presence in India, USA and Europe and will look for opportunities to set up presence in other potential markets in the next few years to enable it to continue its leadership position in the supply chain solution space.
