KKR, Goldman invest $53m in India’s TVS Logistics
KKR has agreed to invest $47 million in TVS Logistics, an Indian supply chain manager that services the auto, distribution, electronics and component manufacturing industries. As part of the transaction, existing investor Goldman Sachs will inject a further $6 million into the company. The funds will be used to expand TVS’ business through organic growth and acquisitions.
According to local media, KKR and Goldman will between them hold about 40% of the company. Goldman and TVS Capital originally invested $25 million in 2008, with the former putting in most of the capital. TVS Capital has now exited its stake.
"This investment is in line with our on-going strategy to partner with strong promoter groups and management teams in a sector which builds on and benefits from the Indian industrial uptick," Sanjay Nayar, head of KKR India, said in a statement. "Logistics consolidation in an otherwise fragmented industry and best in class supply chain management are clear areas where KKR, partnering with TVS Logistics, can add a lot of value."
According to sources familiar with the transaction, KKR's involvement stems from Heramb Hajarnavis, who joined the firm from Goldman Sachs Principal Investment Area in 2010. Hajarnavis led Goldman's original investment in KVS and sits on the company's board.
KKR was also impressed by the TVS business model. The company, which is expected to record revenues of $300 million for the current financial year, is an auto industry specialist, offering just-in-time services to the likes of Ford, Renault, Nissan, Hyundai and Toyota. It has operations in the US, UK, Spain, Germany and Thailand. Japanese auto companies in particular are increasingly using Thailand as a components manufacturing base.
India's broad logistics sector is worth about $150 billion, or 13% of the country's GDP. Within that, the organized logistics segment is worth $30-50 billion and outsourced logistics services in particular are growing 20% year-on-year. KKR expects TVS' business to expand even faster.
"India has become a global manufacturing hub for small cars," the source added. "Ford has a strong presence here and Hyundai manufactures all its small cars here and exports them globally. Production of commercial vehicles and the auto component export business are both growing strongly."
TVS and KKR were advised by Kotak Mahindra Capital and JM Financial, respectively.
More on Industrials
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.