PE-backed TVS Logistics makes second bolt-on this year
TVS Logistics, an Indian supply chain manager backed by KKR and Goldman Sachs, has acquired US-based Wainwright Industries for INR500 million ($8.8 million).
According to The Economic Times, the Chennai-based company has made an initial investment of INR250 million for Wainwright and will pay the remaining tranche over the next two years.
Founded in 1947, Missouri-headquatered Wainwright provides manufactured products and inventory management services to leading automotive, aerospace and consumer products manufacturers and their suppliers.
"With the acquisition of Wainwright, we have covered all the capabilities required to provide the end-to-end production supply chain solutions," said R. Dinesh, managing director of TVS. "With this, we can go to the customer to offer a complete outsourcing model."
KKR and Goldman invested $53 million in TVS in April last year for around a 40% stake. KKR's contribution was $47 million, while Goldman put in $6 million adding to its existing investment it made in 2008.
TVS, which provides supply chain services to motor companies like Ford, delivering car parts to their factories in India, is seen by KKR as a proxy for the rise of the country's auto sector.
This Wainwright deal marks the second acquisition for TVS this year, following the purchase of UK-based Rico Logistics for INR1 billion in February. In 2011, it bought another US firm - Manufacturers Equipment and Supply Company.
By guiding TVS though a phase of acquisitive growth, KKR says it intends to take advantage of the fragmented Indian logistics industry, which has to date been dominated by regional, sub-scale players offering few services to local customers.
"TVS has consistently been able to acquire small bolt-on companies at low valuations and then accelerate growth by providing the acquired capabilities to a larger roster of customers," Sanjay Nayar, Head of KKR India, told AVCJ in January. "It is in the process of acquiring capabilities to cross-pollinate amongst the various subsets within logistics. This will allow it to offer end-to-end supply chain solutions across different geographies."
Edgepoint Capital advised on this latest transaction.
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