Stellar Value Chain Solutions Pvt. Ltd, a logistics company backed by private equity firm Warburg Pincus, has signed a pact to buy the surface transport business of Patel Integrated Logistics Ltd in its third acquisition since starting operations less than three years ago.
Mumbai-based Stellar will buy Patel Roadways for Rs 38.50 crore ($5.5 million), subject to customary closing adjustments, Patel Integrated said in a stock-exchange filing. The transaction is likely to close by the end of June.
Patel Roadways' revenue for 2017-18 was Rs 153.53 crore, 36% of the total consolidated revenue of Patel Integrated.
Patel Integrated also said the sale will help it repay its loans, reduce overhead costs, improve profitability and pursue growth opportunities in line areas such as warehousing.
Stellar was set up by Anshuman Singh, a former chief of retail pioneer Kishore Biyani-led Future Supply Chains Solutions Ltd, in the middle of 2016. Soon after, Warburg agreed to invest up to $125 million (Rs 835 crore then) in the new logistics company.
Stellar is making the acquisition through wholly owned unit Innovative Logistics Service Pvt. Ltd. It had acquired Innovative Logistics last year. Previously, Stellar had bought Kelvin Cold Chain Logistics in 2017.
While the acquisition of Innovative had helped Stellar enter the express-logistics segment, the purchase of Kevin Cold Chain enabled it to establish a presence in the cold-chain transportation segment.
Through Innovative Logistics and Kelvin Cold Chain, Stellar runs a fleet of more than 1,000 trucks in express and temperature-controlled transportation, according to its website.
Stellar operates in 30 cities and has a logistics area of 9 million sq ft. It aims to have 50 million sq. ft. of warehousing operations spread across 40 logistics parks and 30 cities, and run a cross-country fleet of 50,000 vehicles by 2022-23, according to its website.