Global Investment House “Global” announced today that it has acquired through its private equity funds a significant equity stake in Reach (Cargo Movers) Pvt. Ltd, a surface transport company in India.
The transaction was concluded by the private equity funds team for its Funds focused on investing in the MENA and South Asia region.
Reach was established in 1971, the existing management took over the company in 2001 and changed the focus from being an agent for various transporters to a logistics service provider and focused on Providing Logistic Service, Transportation of Small & Parcel Consignments, Transportation of Capital Goods & Construction Equipments.
Currently Reach provides logistics support for motor spare parts, engines, raw materials, finished products, project equipment, entire plant, sophisticated machineries, heavy transformers, oversized boiler and tankers.
The Funds have invested USD5 million for a significant stake in the company. The company has been aggressively growing with revenues and net profits growing at a CAGR of over 49% & 58% over the last four years. The company is consolidating its market position as a provider of surface transport to the large corporate in the region (which include companies like Tata Group, Cummins, Bharat Forge etc).
Shailesh Dash, Senior Vice President and Head of Private Equity Group at Global said, “The purchase of a significant stake is an important step to strengthen our presence in the lucrative Indian market.”
He considers this investment in Reach as an important step towards acquiring assets in the logistic sector in India, which is one of the fastest growing segments in the country’s economy.
The Indian government plans to make significant investment in the infrastructure sector and the logistics industry will be a direct beneficiary in the coming years and this augurs well for the company.
The management team and promoters of Reach have spent more than 30 years in the industry, have extensive experience in Indian market which is critical, while operating in a competitive market.
Dash also stated that the private equity funds already has existing exposures in the Indian economy such as Reliance Petroleum (an investment which has witnessed over 100% price appreciation in 15 months) in India.
Global would assist the company in exploring synergies with other companies in the logistics space in the region and also assist in evaluating inorganic growth opportunities in order to increase Reach’s growth and also expand beyond the region, he concluded.
Source: Al Bawaba