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Blackstone close to buying stake in Allcargo Logistics’ warehousing division: Bloomberg
Posted on Monday, 13 January 2020 10:32
Private equity group Blackstone is nearing a deal to pick up a stake in the warehousing unit of Allcargo Logistics for INR 3.80 billion (USD 53.50 million), Bloomberg reported, citing people with knowledge of the matter.
The size of the holding was not disclosed by the sources, who also asked not to be identified as the situation is still private.
However, a report by Bloomberg in October suggested Blackstone was looking to acquire a 70.0 per cent stake in the warehousing portfolio.
According to the insiders, India-based Allcargo could announce the potential deal as soon as today, with its board scheduled to approve the transaction within the next 24 hours.
Blackstone is said to have the opportunity to further increase the stake over the coming months, based on certain pre-determined performance milestones being met, which could ultimately leave the logistics company with a minority holding.
The buyout group is expanding into transportation in India in a bid to tap the growing demand for warehouses by global powerhouses such as Amazon and Walmart, Bloomberg observed.
In August 2019, Allcargo said it plans to invest INR 30.00 billion in the next four to five years to set up 15.00 million square feet of warehousing space, including inland container depots and private freight terminals apart from build-to-suit locations.
The company is billed as India’s first and largest integrated logistics provider in the private sector with more than 300 offices across over 160 countries.
Shares in Allcargo rose 5.2 per cent to INR 104.80 at 15:05 today, giving the business a market capitalisation of INR 25.77 billion.
Bloomberg’s report comes days after Blackstone secured USD 3.40 billion from investors for its first fund dedicated to investments in the life sciences sector.
Zephyr, the M&A database published by Bureau van Dijk, shows there were 370 deals targeting freight transportation arrangement companies announced worldwide in 2019.
In the largest of these, Denmark-based DSV agreed to acquire Switzerland’s Panalpina Welttransport for CHF 5.10 billion (USD 5.24 billion).
Other targets included CEVA Logistics, Bollore, Staci and Global Chartering.
© Zephus Ltd