TVS Logistics Services Ltd. (TVS LSL), the India-based multinational third-party logistics service provider, announced that it has reached an agreement with Caisse de dépôt et placement du Québec (CDPQ), one of North America’s largest pension fund managers. Under this agreement, CDPQ will invest over INR 1000 crores ($155 million US) to acquire a sizeable minority stake in TVS LSL, a privately held subsidiary of the TVS Group. Following this transaction, existing investors Goldman Sachs and KKR will fully exit their investments in TVS LSL. CDPQ will purchase most of their joint stake, while TVS family members and management will acquire the remainder.
Beyond this equity investment, CDPQ is ready to commit significant additional capital to finance transformative acquisitions and support the expansion of TVS LSL in India and globally. R. Dinesh, Managing Director, TVS Logistics Services Ltd., said, “We are happy to have CDPQ, a leading global institutional asset manager, on board. Over the years, we have benefitted from a meaningful partnership with global investors like Goldman Sachs and KKR. We believe CDPQ is the perfect long-term partner for our next phase of growth as we look to expand the scale of our business. TVS Logistics, over the years, has grown at a CAGR of more than 30% and has a strong global track record of growth, both organically and through acquisitions. We look forward to continuing this evolution and building on our successes through a fruitful partnership with CDPQ.”
Michael Sabia, President and Chief Executive Officer, CDPQ, said, “Efficiency in delivering goods to customers is a key driver of business performance. TVS Logistics is well positioned to seize growth opportunities resulting from recent tax reforms in India and global demand for state-of-the-art logistics services. CDPQ’s strategy is to identify world-class management teams and to support them over the long term. This is precisely what we intend to do with TVS Logistics as it expands in its home market and abroad.”
Sanjeev Mehra, Goldman Sachs’ representative on the board of TVS LSL, said, “We have been privileged to partner with Dinesh and the TVS Group as their first private equity investor. During our eight year long partnership together, we have successfully scaled the company, added new services and geographic capabilities. Goldman Sachs is proud to have been part of this transformation and growth in creating an Indian champion through one of our first investments in India.”
Sanjay Nayar, Member & CEO of KKR India, said, “We are proud to have worked alongside the TVS Logistics team in this partnership to enable several game-changing acquisitions across geographies. This expanded their service offerings and capabilities globally. With this unique platform, we are confident TVS will experience continued success with CDPQ.”
Over the years, TVS LSL has substantially widened its service capabilities, including last mile delivery, demand forecasting, and technology logistics through its acquisitions in the UK such as Rico Logistics and Multipart. It further added capabilities like sub-assembly and sequencing through its Wainwright acquisition in the US. With a global footprint and suite of sophisticated capabilities and services, TVS LSL is now well positioned to increase its coverage across all segments of the logistics supply chain in India and other parts of Asia.
TVS LSL has a significant presence in the UK and in the USA. Its UK business has grown sevenfold in the last five years from £40m to £275m. It is also one of the largest Indian employers in Northern England with more than 3,500 employees in the UK and in Europe. In the USA, it operates through seven facilities with over 800 employees.
CDPQ opened CDPQ India, its New Delhi-based office, in March 2016. It is led by Anita Marangoly George, Managing Director, South Asia, whose mandate is to identify the best investment opportunities in the South Asian markets. The transaction is subject to the approval by respective boards and by the Competition Commission of India (CCI). JM Financial Institutional Securities Limited acted as the exclusive financial advisor to Goldman Sachs and KKR.