CHENNAI: The Tata Group has agreed to sell its 3PL Drive India Enterprise Solutions (DIESL), to 3PL TVS Logistics Services for an undisclosed sum.
Founded in 2003, as a 50:50 joint venture between Tata International and Tata Industries, DIESL has since built a pan-India 3PL network with more than 180 warehouses and 6.5 million square feet of storage space in North and East India catering primarily to the consumer products industry. The company had revenues of over Rs950 crore (US$150 million) in FY2014-15.
TVS LSL, spun out of auto distributor TVS & Sons in 2004, operates across India, the UK - where it owns Rico Logistics and Multipart - the USA, Europe and South East Asia. The company had revenues of approximately US$500 million in FY 2014-15 and manages over 3 million square feet of warehouse space in South and West India focused primarily on the automotive industry.
The sale, which is subject to regulatory approval, is being funded by a reported US $54.5 million minority investment in TVS LSL by the Tata Opportunities Fund.
TVS LSL managing director, R Dinesh said: "We are thrilled to be able to bring together two uniquely capable and complementary entities in the 3PL space in India. This move is highly strategic and enables us to add to our already expanding base of non-auto customers. Besides, we have widened our service capabilities including last mile delivery and other capabilities like demand forecasting and technology logistics through our overseas acquisitions."
Padmanabh Sinha, managing partner of the Tata Opportunities Fund in India added: "The fund and its limited partners are delighted to be able to support TVS LSL in this strategic endeavor and partner them in building a truly capable 3PL powerhouse in India. The fund believes that the new government's thrust on developing infrastructure and reforming taxation, especially the goods and services tax, will provide a conducive environment for the growth of professionally managed 3PL companies offering world class solutions."