NIIF, DP World acquire India's PE-backed Continental
India’s National Investment & Infrastructure Fund has acquired a controlling stake in PE-backed logistics player Continental Warehousing Corporation (CWCNSL) in a joint deal with Dubai-based port operator DP World.
Hindustan Infralog, an investment platform established by the firms last year, take a 90% stake in CWCNSL. Exact financial terms have not been disclosed, but in a statement DP World said the total consideration is less than 5% of $11.6 billion, its net asset value (NAV) as of December 2017 – implying a price of no more than $581 million.
CWCNSL’s founders, the Reddy family, will retain a 10% holding, while the company’s PE backers, which include the International Finance Corporation (IFC), Warburg Pincus and Abraaj Capital will all make full exits.
The sale represents a shift in plans for the company, which filed for an IPO in 2016 that would have provided a full exit for Abraaj and a partial exit for Warburg Pincus (IFC planned to retain its full stake). CWCNSL received approval for its listing last year, but media reports indicate the promoters believed the trade sale route could provide a higher valuation.
Warburg Pincus first invested in CWCNSL in 2011, committing $200 million for stakes held by IL&FS Investment Managers and Aureos Capital. At the time of the IPO filing, the firm held a 40.4% interest. Abraaj gained its stake in CWCNSL through its 2012 acquisition of Aureos, and had a 4.6% interest as of 2016, while IFC had a 9.7% stake.
Founded in 1997, CWCNSL owns and operates cargo handling and storage facilities, and also offers third-party logistics services through its subsidiary Delex Cargo India. Its logistics network covers a total area of over 400 acres, with capacity of more than 660,000 20-foot container units (TEUs).
DP World has been present in India since 1997 as well, and currently operates six container port terminals in the country with over 6 million TEUs of gross capacity. It also operates container trains connecting ports with remote areas.
NIIF launched in 2015 with a view to raising about INR400 billion ($6.2 billion) for a mother fund and several subsidiary vehicles. It has received the backing of several prominent investors including the Asian Infrastructure Investment Bank and the Abu Dhabi Investment Authority.
Its vehicles include the NIIF Master Fund, which invests in mature businesses with long-term track records. The Master Fund set up Hindustan Infralog with DP World with a mandate to invest up to $3 billion in transport and logistics assets. The CWCNSL deal represents the platform’s first investment.
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