Online food delivery platform Swiggy on Thursday acquired Chennai-based Lynks Logistics (LYNK), a tech-led FMCG retail distribution company, from Ramco Cements and other promoters of Ramco Group of companies, in a share swap deal.
With this acquisition, Swiggy enters the country’s food and grocery retail market, which is amongst the world’s largest and fastest growing, estimated at $ 570 billion in size and expected to grow at 8% year-on-year. Avendus Capital was the sole financial advisor to LYNK and its shareholders on this transaction.
In a regulatory filing, Ramco Cements said it will sell over 499.5 million equity shares held by it in LYNK to Bundl Technologies, which operates under the Swiggy brand. Simultaneously, Ramco Cements said it will acquire 2.41 million compulsory convertible preference shares of Bundl Technologies in consideration of the sale of shares.
Ramco Industries in a separate filing said it will sell its entire shareholding of over 461.5 million equity shares in LYNK to Bundl Technologies in exchange for 2.23 million compulsorily convertible preference shares (CCPS) of Bundl.
Swiggy said it has entered into a definitive agreement to acquire LYNK, paving the way for it to enter India’s food and grocery retail market with a technology-led distribution platform.
LYNK works with leading FMCG brands as an authorised distributor, connecting them to retail stores and offering a one stop solution to achieve their sales and growth goals. Further, leveraging its proprietary technology stack, LYNK will continue to operate as an independent business post the acquisition led by co-founder and CEO, Shekhar Bhende.
Founded in 2015 by Abinav Raja and Bhende, LYNK is one of India’s largest tech-drivenFMCG retail distribution companies. LYNK enables leading FMCG brands to grow their retailpresence through its network of 100,000 plus retail stores across the top 8 cities of India. It leverages a proprietary, integrated technology platform to power the entire retail distribution value chain across warehousing, inventory management and logistics operations.
Sriharsha Majety, CEO, Swiggy, said, “LYNK is uniquely positioned in the retail distribution space with their brand-first, tech-led operating model and has demonstrated success with multiple FMCG brands. Our experience in supply chain and logistics gives Swiggythe unique opportunity to help LYNK scale up their offerings and empower retailers to serve theircustomers better.”
LYNK offers faster order to delivery turnaround and improved on-the-shelf availability through better fill rates to retail stores enabling them to increase sales and serve their customers better. Post acquisition, LYNK will leverage Swiggy’s strength in technology and logistics to rapidly scale their existing platform.
Bhende, co-founder, LYNK, said: “Over the last few years, we have focused squarely on helping FMCG brands to meet their retail ambitions. Given our rapid growth, we believe we are uniquely placed to lead the digitisation of retail distribution in India. With Swiggy, we now hope to further accelerate our growth and double down on the tremendous opportunity before us. We are deeply encouraged by our interactions with Swiggy, both companies have an innate builder bias and I look forward to working together.”