India’s biggest cargo company Allcargo Logistics Ltd is in the final round of discussions to pick up a controlling stake in smaller local rival Gati Ltd, six per cent owned by Goldman Sachs, two people in the know told The Economic Times.
Allcargo aims to buy the entire promoters’ stake of 14.38% in Gati and is likely to make an open offer after that, said one of the persons.
The firm had been in advanced talks for the transaction since August last year, but withdrew subsequently. “The current discussions are only to buy the promoter stake, but not other institutional investors,” the person added.
A person in the know told Bloomberg that Allcargo, which is primarily into foreign trade business, is in talks to acquire Gati at an equity valuation of about Rs 1,300 crore ($183 million). The person added the purchase will trigger a mandatory offer to buy Gati’s outstanding shares.
Companies from Blackstone Group to Warburg Pincus are piling into India’s logistics and warehousing industry buoyed by demand from e-commerce firms such as Amazon.com Inc and Walmart Inc.’s Flipkart to provide last-mile connectivity into cities as well as remote hinterlands across one of the world’s largest landmass.
Meanwhile, New York-based Tiger Global Management is in talks to invest $20 million (Rs 142 crore at current exchange rate) for a minority stake in Sequoia Capital-backed invoice discounting platform KredX, two people aware of the matter told Mint. Invoice discounting provides instant access to cash tied up in outstanding invoices.
Founded by Manish Kumar and Anurag Jain in 2014, KredX raised Rs 42 crore Series A round in 2016 led by Sequoia, and joined by early backer Prime Venture Partners. KredX, earlier known as Mandii, is owned and operated by Minions Ventures Pvt. Ltd.
