Canadian pension fund manager CDPQ today announced an investment of over Rs 1,000 crore to acquire a sizeable minority stake in TVS Group’s third-party logistics arm, which will include buying out the existing private equity investors Goldman Sachs and KKR.
“CDPQ will invest over Rs 1,000 crore (USD 155 million) to acquire a minority stake in TVS Logistics Ltd. With this transaction, Goldman Sachs and KKR will fully exit from their investments”, TVS Logistics Services’ Managing Director R Dinesh told reporters here.
Declining to reveal the percentage of stakes held by Goldman Sachs and KKR, he said, “Goldman Sachs had done investments of about Rs 120 crore and KKR was about Rs 240 crore”.
Goldman Sachs had pumped in Rs 120 crore in two tranches from 2008 onwards while KKR invested in the company in 2012.
CDPQ will purchase most of their joint stake (held by KKR and Goldman Sachs) while TVS family members and management will acquire the remaining, he said.
“We are perfectly in align with CDPQ. They are ready to invest more”, he said.
CDPQ, which has done a slew of investments in the country, including buying a 30 per cent stake in Edelweiss ARC, will also “commit significant additional capital” for financing acquisitions and expansion of the company, a joint statement released by the two companies said.
“TVS Logistics, which clocked revenues of about Rs 4,200 crore last financial year, has set a target of achieving Rs 5,700 crore in this year”, Dinesh said.
“Our target is to triple that revenue in the next three to five years,” he added.
Stating that the company has been diversifying its business, he said, “earlier our focus area was one hundred per cent in auto sector. Now it is less than 30 per cent. In the United Kingdom majority of the business is defence. We are talking about projects of about two billion pounds.” Asked whether the company was looking to go public, he said, “We always have the option to go public but not now.
Terming that the TVS Logistics a “very dynamic” company and has been growing very fast over the last few years, CDPQ President and Chief Executive Officer Michael Sabia, through a video message, said, “we are convinced that the company has grown under the leadership of Dinesh. We are coming on board to help it grow not only in India but also internationally”.