TVS Logistics partners with Tata Opportunities Fund to acquire DIESL

The transaction would make TVS Logistics one of India’s most competitive and diversified logistics companies

26th May 2015, Chennai: TVS Logistics Services Limited (TVS LSL), India’s leading 3rd Party Logistics (3PL) service provider, today announced that an understanding had been reached, subject to the requisite regulatory clearances, including from the Competition Commission of India (CCI), to acquire Drive India Enterprise Solutions Limited (DIESL), for an undisclosed sum. The transaction is expected to combine India’s most capable and diversified companies in the logistics space. The Tata Opportunities Fund, the flagship Private Equity fund advised by Tata Capital, will invest in TVS LSL to fund the acquisition and support its future growth through a minority stake.

The two companies, TVS LSL and DIESL, have complementary strengths across sectors and geographies. TVS is strong in automotive and has diversified its businesses in beverages, IT, healthcare, telecom, and defense globally. On the other hand, DIESL is strong in consumer durables and has marquee customers in FMCG, retail, technology, and telecommunications. Further, DIESL’s strong warehousing network in North and East India provides a good fit with TVS LSL, which has a strong South and West India footprint. TVS LSL will integrate DIESL’s operations in due course. Together, the combination will enjoy increased cross-selling opportunities given their repertoire of capabilities and customer access to provide a ‘one-stop-shop’ solution for new and existing customers.

R. Dinesh, Managing Director of TVS LSL, 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. We have also widened our service capabilities, including last-mile delivery and other capabilities like demand forecasting and technology logistics through our overseas acquisitions. With our sophisticated range of services and capabilities, TVS LSL would be able to provide unmatched support to our (TVS & DIESL) clients in India.”

Padmanabh Sinha, the Managing Partner of the Tata Opportunities Fund’s advisory team in India, said, “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. With this transaction, the Tata Opportunities Fund continues its strategy of investing in key companies in various segments. 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.”

K. R. S. Jamwal, Executive Director of Tata Industries and Director on the Board of DIESL, said, “TVS and we share common values of trust and fairness and enjoy a warm relationship, especially in the automotive business. We are pleased that TVS LSL, along with the Tata Opportunities Fund, will be carrying forward the DIESL business, which Tata Industries and Tata International have nurtured. We are confident the partnership will be mutually rewarding”.