KKR, Goldman to exit as CDPQ invests $155m in India's TVS Logistics

The Canadian pension plan will purchase the bulk of KKR and Goldman's interests in TVS Logisitics - a privately held subsidiary of TVS Group - with TVS family members and management acquiring the remainder. CDPQ has also agreed to provide additional capital to the company in order to support expansion in India and globally.

Goldman first invested in TVS Logistics in 2008, accounting for the majority of a $25 million commitment made alongside TVS Capital, a unit linked to TVS Group. Heramb Hajarnavis - now of SeaLink Capital Partners - led the deal for Goldman. He moved to KKR in 2010 and was instrumental in the PE firm's $47 million investment in TVS Logistics two years later, with Goldman contributing $6 million. TVS Capital exited at this point, leaving KKR and Goldman with about 40% of the company between them.

The plan was to drive consolidation in India's fragmented logistics sector, which has traditionally been dominated by sub-scale players offering few services to local customers. This was to be achieved through a combination of M&A and organic growth, but with a strong industry and export focus.

Since then, TVS Logistics has widened its service capabilities, including last-mile delivery, demand forecasting, and technology logistics through acquisitions such as UK-based Rico Logistics in 2013 (another UK business, Multipart, was bought in 2011). The company further added capabilities like sub-assembly and sequencing with the purchase of US-based Wainwright Industries, also in 2013.

TVS Logistics now provides integrated logistics services to sectors ranging from automotive and IT to healthcare and fast-moving consumer goods. It has a presence in 14 countries spanning Asia Pacific, Europe and North and Central America. The company has 15,000-plus workers and manages more than 10 million square feet of warehouse space in India, serving over 100 blue-chip customers.

"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," Michael Sabia, president and CEO of CDPQ, said in a statement.

The pension fund opened an office in India earlier this year. Other investments in the country include partnering with Kuwait Investment Authority to support a ICICI Venture and Tata Power-run platform that invests in domestic power projects, and committing up to $700 million to Edelweiss Group for investments in private debt.

The TVS Logistics deal is subject to approval by India's competition regulator. It represents KKR's fourth announced or completed full or partial exit in the country over the last 12 months, following Dalmia Cement, Alliance Tire Group and Gland Pharma.

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• Topics
• South Asia
• Trade sale
• Industrials
• Support services
• KKR
• Goldman Sachs
• India
• Exit
• Logistics
• Transportation