TVS Logistics acquires U.S. firm

R. Dinesh (centre), Managing Director, TVS Logistics Services; Gregg Gruizenga (right), CEO, MESCO; and Andrew T. Simkin, U.S. Consul General, at a press conference in Chennai on Tuesday. Photo: Bijoy Ghosh   | Photo Credit: Bijoy Ghosh

In what is claimed to be a strategic move, TVS Logistics Services Ltd. (TVS LSL) has acquired closely-held Michigan-based Manufacturers Equipment & Supply Company (MESCO), bought out the joint venture partner in TVS America and set up a holding company in the U.S.

The three-in-one announcement came at a press conference here on Tuesday. These three America-centric initiatives involved a total investment of around Rs.50 crore for TVS Logistics.

R. Dinesh, Managing Director of TVS Logistics, said “Our acquisitions are not about size but about purpose.” He went on to claim that “We approach in a smart way acquiring capabilities.”

The acquisition of MESCO, he said, would help TVS Logistics to get into a new area in the supply-chain management, that is, tool and die. Further, it would beef up the company's presence in the U.S. even while allowing expansion into the North American market. More than all these, the MESCO buy would give it the management band-width. With around 60 employees on its fold, the $30 million MESCO had around 250 active customers. The sales number for the financial year ending 2012 is projected to go up to $50 million.

TVS Logistics bought out Global Rush, the joint venture partner in TVS America since the latter was not able to bring in more money into the venture. Mr. Dinesh said that it was an amicable disengagement for Global Rush. Thanks to Global Rush, TVS America was able to set up a seven-member China sourcing base. TVS Logistics and MESCO would leverage the China sourcing base to push business, Mr. Dinesh said.

The MESCO buy was the second major acquisition of TVS Logistics in the past 15 months. In October 2009, the company acquired Multipart Holding in the U.K. Mr. Dinesh expressed optimism that all these acquisitions would help the company offer a complete range of services to its customers. The setting up of a holding company in the U.S. — TVS Logistics Investment U.S. — was more to facilitate consolidation of investments, Mr. Dinesh said.

Following the acquisition of MESCO, sales of TVS Logistics would scale to Rs. 1,200 crore this year, up from Rs. 650 crore in 2009-10. Close to 38 per cent of sales would be from India, Mr. Dinesh said. In the normal course, he expected sales to reach Rs.1,700 crore in 2011-12. He said TVS Logistics was looking at acquisitions in defence, aviation and medical equipment Mr. Dinesh indicated that TVS Logistics was well on course for an IPO (initial public offer). At this moment, he would not like to hazard any guess on the fund-rising initiative. It all depended on “our acquisition plans,” he said.

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Printable version | May 15, 2021 4:15:06 AM |

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