TVS Logistics Services takes over UK's Rico Logistics with stake buy

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TVS Logistics Services Ltd has picked up an 85 per cent stake in UK-based Rico Logistics for Rs 100 crore, a top company official said. (Reuters) TVS Logistics Services Ltd has picked up an 85 per cent stake in UK-based Rico Logistics for Rs 100 crore, a top company official said. (Reuters)
SummaryThis acquisition is expected to help TVS Logistics to add key service 'capabilities'.

TVS Logistics Services Ltd has picked up an 85 per cent stake in UK-based Rico Logistics for Rs 100 crore, a top company official said.

"To achieve USD 1 billion (revenue) by 2015, we will need to have few more acquisitions. I expect 50 per cent contributions would be from organic and remaining through inorganic growth," TVS Logistics Services Ltd Managing Director R Dinesh told reporters here.

The acquisition of Rico Logistics was done through holding company TVS Logistics UK, he said.

This acquisition is expected to help TVS Logistics to add key service 'capabilities', including foray into a new verticals like IT, Telecommunication and Medical equipment, Dinesh said.

TVS Logistics Services last year had said it had reached an agreement with global investment firm Kohlberg Kravis Roberts and Company (KKR) and Goldman Sachs for an investment of Rs 268.8 crore (approximately USD 53 million). KKR would invest Rs 242.4 crore.

For acquisition of Rico Logistics, Dinesh said some part of the funds (invested by KKR) was utilised along with some internal accruals.

"This acquisition help us to add a number of new capabilities and allow us to offer new solutions to our existing and new customers in India and Asia. We will have synergies across our operation," he said.

This is the third acquisition by the city-based company in the United Kingdom, after CJ Components in 2004 and Multipart Holdings in 2009, which are now functioning under one umbrella organisation -- TVS Supply Chain Solutions, Dinesh said.

Stating that the existing management of Rico Logistics would continue to serve the organisation post the acquisition, Dinesh said the employee strength (with this) in Europe would exceed the 2,000 mark.

He replied in the affirmative when asked if the company has lined up any more acquisitions, saying three more deals are in the pipeline.

On the company's target for this year, he said TVS Logistics expects to reach Rs 2,500 crore revenue by March 2013. Last year, it had reported revenues of about Rs 1,850 crore.

Stating that the domestic market remains dull due to uncertain economic conditions worldwide, he said TVS Logistics hopes to grow at about 15 per cent this year.

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