In what is termed a 'significant major step', TVS Logistics Services Ltd., a leading name in the field of after-market logistics services, has announced the acquisition of Chorley-based Multipart Holdings for an undisclosed sum.
Multipart Holdings is a Rs.475-crore turnover profit-making company. It employs around 250 people across four locations in the U.K.
Addressing a press conference here on Wednesday, Suresh Krishna, Chairman of TVS Logistics, said the buy in the U.K. could turn out to be a game-changer move for TVS Logistics. The acquisition had also helped TVS Logistics surpass Rs.1,000-crore sales target set for the year 2010. In view of this, the company had decided to revisit the sales target, Mr. Krishna said. Accordingly, it had fixed a target of Rs.2,000 crore for 2012, he added. Stating that the company had grown significantly within a short span, he expressed the optimism that TVS Logistics could go for an initial public offer in the not-too-distant a future. ``It is our desire to cover Brazil and China very quickly,’’ he said. "These are on our menu,’’ he added.
TVS Logistics currently operates in the U.K. through its subsidiaries, TVS Automotive Europe nd TVS CJC. It has also penned an alliance with Davis Turner, one of the largest logistics service providers in the U.K. In the mainland Europe, it has co-operation pact with Wincanton Trans European. In Spain, it operates through its subsidiary TVS Logistics Iberia SL. In Thailand, too, it has subsidiary - TVS Logistics SIAM. In the U.S, it has a representative office in Detroit.
This is the first major acquisition by TVS Logistics since its path-breaking initiative in April last year to let private equity player Goldman Sachs invest Rs.100 crore into it and pick up an undisclosed minority stake. Mr. Krishna said TVS Logistics would continue to tap new territories and look for acquisition opportunities in its core areas.
Multipart specialises in supplying spare parts and components to the automotive, defence and utility sectors. Its client list includes Isuzu Truck (the U.K.), TVR (sports car), Modec (electric vehicle) and Dennis Eagle (refuse truck makers) in the automotive sector; MBDA and the Ministry of Defence in the defence sector; and Anglian Water Services in the utility sector. Multipart was bought out by its management team sometime in 2008 in a £20 million deal.
Chris Gateley, who will continue to head Multipart, said funds were a major constraint for the company to grow in the recession-hit environment. The buy-out by would help Multipart to get ``access to finance’’ on the balance sheet strength of TVS Logistics. The buy-out also would open up huge sourcing opportunity in India for Multipart, who could now leverage the network of TVS Logistics, he added.
While declining to divulge the acquisition cost, R Dinesh, Managing Director, however, said TVS Logistics would invest Rs.125 crore over the next two years to fund the growth of Multipart. He indicated that the company would use its overseas ventures to spot acquisition opportunities. He also hinted at TVS Logistics consolidating its presence in the U.S.