TVS Logistics has acquired 85 per cent stake in U.K-based Rico Logistics, a move that simultaneously ramps up its European operations and pushes the company closer to its goal of being a $1 billion firm by 2015.
According to Managing Director R. Dinesh, the total cost of the acquisition, which is placed at Rs. 100 crore, was funded through funds raised from KKR last year and internal accruals.
“It’s no secret that our overseas operations are more profitable than our domestic business. The acquisition of Rico will bring on board a new capability for us, last-mile delivery, and add new service verticals such as information technology, telecom and medical. We hope that we can replicate some of their capabilities for our Indian and Asian customers,” Mr. Dinesh said, while addressing reporters here on Thursday.
The acquisition is TVS Logistics’ third in the U.K. The company had acquired CJ Components in 2004, and Multipart Holdings in 2009.
“By 2015, our inorganic and organic business will contribute equally to our revenue. To this end, we have another three smaller acquisitions planned, which we will announce by March this year,” he said. The existing management of Rico Logistics would continue to serve the organisation post the acquisition, Mr. Dinesh said, adding that with this acquisition, the company’s employee strength in Europe would exceed the 2,000 mark.
Rico Logistics, with nearly Rs. 400 crore in revenue, was founded in 1988 as a same-day courier company, and has clients that include companies like IBM and Dell.
On the outlook of the company, Mr. Dinesh said while the industry reported less than 5%, TVS Logistics grew by around 10-15%.
“We will end this year with a turnover of around Rs. 2,500 crore, though it was not as high as we expected because of the market,” he said.
