TVS Logistics’ funding pact with KKR, Goldman Sachs

TVS Logistics Services, one of India’s leading third-party logistics service providers, has announced that it has reached an agreement with an affiliate of Kohlberg Kravis Roberts & Co. L.P., together with its affiliates, “KKR” and Goldman Sachs for an investment of INR 2,688 million (approximately $53 million). KKR, a leading global investment firm, will invest INR 2,424 million (approximately $47 million). Goldman Sachs, a major global investment bank and initial outside investor in the company, will make an add-on investment. The primary proceeds will be used to further expand the company’s logistics business.

This is the second time that TVS Logistics has successfully received private equity funding. In 2008, Goldman Sachs made an initial investment in the company.

Said Mr. R. Dinesh, Managing Director, TVS Logistics Services: “We decided to go for the second round of funding because we see the market potential and opportunity for us to expand and grow globally. The additional investment will allow TVS Logistics to continue its expansion both through acquisitions and organic growth. Besides growing with our existing customer base, we also look forward to our private equity investors, Goldman Sachs and KKR, helping us expand our capabilities and geographic footprint.”

Mr. S. Ravichandran, Executive Director, TVS Logistics Services, said: “Within the Indian logistics sector, we focus on the auto and discrete manufacturing sectors. These industries are experiencing rapid growth driven by both domestic and export demand and currently have relatively low third-party logistics (“3PL”) penetration compared to their global peers. This funding will help us to service our customers even better.”

Said Mr. Sanjay Nayar, Head of KKR India: “This investment is in line with our ongoing strategy to partner with strong promoter groups and management teams in a sector which builds on and benefits from the Indian industrial uptick. Logistics consolidation in an otherwise fragmented industry and best-in-class supply chain management are clear areas where KKR, partnering with TVS Logistics, can add a lot of value.”

According to Mr. Heramb Hajarnavis, Director of KKR India, TVS Logistics has demonstrated a strong track record of delivering just-in-time capabilities to these highly demanding customers.

Mr. Sanjeev Mehra, Managing Director at Goldman Sachs and a Director at TVS Logistics Services, observed: “Since our initial investment in 2008, TVS Logistics has demonstrated strong growth and successfully expanded across the globe, acquiring new commercial capabilities and establishing footprints in key geographies to extend its reach throughout North America, Europe and Asia. Goldman Sachs’ additional investment in this second round of funding further verifies and symbolizes our conviction in the company’s strong future growth prospects.”

KKR India now has 15 investment professionals based in Mumbai, focusing both on private equity and non-banking financial services. KKR Capstone also has a dedicated presence in the country. With over $1 billion invested in India, KKR’s flexible approach includes a portfolio of majority and minority stakes in companies, including Aricent, Avantha Power, Bharti Infratel, Cafe Coffee Day, Dalmia Cement, and Magma Fincorp.

Goldman Sachs is active in private equity and principal investing in India. Since 2006, the firm has deployed more than $2 billion in the country.