Supply Chain TVS Logistics picks up majority stake in Transtar
Two major acquisitions in a span of less than five months will help TVS Logistics to become a USD 1-billion company by 2017. The company has taken a majority stake in Australia-based Transtar through its Singapore joint venture arm TVS Asianics Supply Chain Solutions.
In May, TVS Logistics, a leading third party logistics service provider, acquired Drive India Enterprises Solutions Limited (Diesl), a Tata Group company.
Diesl and Transtar acquisitions happened in the middle of the year, and only a portion of the revenue will be considered in this financial year. For the year ended March 31, 2015, TVS Logistics reported revenue of around INR 3,000 crore and hopes to end the current financial year with INR 4,800 crore and the next year with INR 6,500 crore, according to R Dinesh, Managing Director, TVS Logistics Limited.
“We will be a USD 1-billion company by 2017. This is subject to the moving Dollar rate. I had told earlier said that our aim was to become USD 1 billion in 2015-16. We were hopeful of that. If these acquisitions had taken place by April 1, we could be close to that,” said Dinesh.
On the Transtar acquisition, Dinesh said that TVS Logistics will invest a total of INR 200 crore, which includes the acquisition cost.
“We will work like partners. It is not like a buyout of the partner. We will have a majority stake, but we cannot disclose the percentage,” he said.
The acquisition of Transtar will help TVS Logistics mark its entry in Australia, and strengthen the company’s presence across Asia Pacific. It also completes the company’s offering by including end-to-end freight forwarding solutions that involves cargo pick to delivery. The deal will help TVS Asianics become a specialized player in international freight forwarding for clients doing business throughout Asia.
Following today’s announcement, TVS Logistics will move its Indian freight forwarding business subsidiary —TVS Dynamics Global Freight Services — to TVS Asianics to work as a consolidated division in freight forwarding business. This is subject to approval by the Reserve Bank of India, said Dinesh.
Hank Meyer, Chief Executive Officer (CEO) and Founder, Transtar, will continue to remain its CEO. With an annual revenue of nearly INR 850 crore, Transtar is one of Australia’s largest privately owned international logistics companies. It has presence in 10 of the top 12 container ports of the world. Nearly 70% of its revenue comes from Asian markets, said Meyer.