TVS Logistics acquires Tata Group’s DIESL

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MAY 28, 2015: TVS Logistics Services Limited (TVSLSL) announced the acquisition of the Tata Group-owned Drive India Enterprise Solutions Limited (DIESL). As per the deal TVS will acquire 100 percent stake in Tata-controlled Rs 953-crore DIESL for an undisclosed sum. “The combination would create one of the largest integrated logistics companies in India with a presence in multiple sectors and the ability to offer a wide range of services across the entire supply chain, from sourcing to last mile delivery. DIESL and TVSLSL together are poised to pose a strong challenge, over time to leading players in the world,” said a statement from DIESL. The deal is subject to all regulatory clearances. It will not only make TVSLSL the largest 3PL firm in India with total revenue of about Rs 4,000 crore (about $620million) but also help the company have a larger play in the non-auto segment with new capabilities. “This coming together of TVS Logistics and DIESL is going to be a real game-changer going forward. Also, it is a profitable deal and will add 25 percent additional revenue to our top line,” said R Dinesh, Managing Director of TVS Logistics. The acquisition is also expected to put the company in a better position for tapping opportunities arising out of current e-commerce boom as DIESL brings with it a strong warehousing network with last-mile delivery capabilities. TVS Logistics has roped in a Tata-related private equity fund to part-finance the acquisition. The rest of the money for the buy will be funded from internal accruals. A part of the $7-billion TVS Group, TVS Logistics is expected to see a fund infusion of around Rs 250 crore through a minority stake sale to Tata Opportunities Fund. The Tata fund is the third private equity fund to pick up a minority stake in TVS Logistics. “From the Indian logistics industry’s perspective, profits of Indian companies have been lower when compared with their peers in other markets. But this combination gives us an opportunity to be a profitable venture,” added R Dinesh.

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