Aqua Logistics Ltd, a Mumbai-based third party logistics solutions provider, is acquiring three logistics firms in Hong Kong, China. The acquisition will be made through its wholly owned subsidiary Aqua Logistics HK Pvt Ltd, it said in a statement.
The three firms include CIT Logistics Ltd, TAG Logistics Ltd, and AGI Logistics Ltd. Aqua Logistics has initially bought 60% shareholding in each of the firms for a total cost of $7.09 million. It further plans to buy 15% more in these firms in trenches over the next five years, the statement added. Aqua Logistics has made an all cash transaction to these deals.
Aqua Logistics shares were traded at Rs 254.55, down by Rs 4.2 or 1.62% at 4:20 pm in the BSE today. In January, the company has raised around Rs 150 crore through its initial public offering (IPO). It has started as a freight forwarding company a decade back, and clocked revenue of Rs 214 crore for the year ended March 2009 with net profit of Rs 9.8 crore.
Aqua Logistics believes that the company will benefit from the acquisitions to expand its presence globally and compete with other multinational firms in the same space. Besides, the acquisition will also help the firm to outsource certain operations from India, which has lower operational costs vis-à-vis other developed countries.
With the global economy showing a sense of revival, the logistics companies are firming up in domestic as well as cross border acquisitions. In major such deals, Transport Corporation of India (TCI), an Andhra Pradesh-based firm, has acquired 51% equity stake in a JV Company, Infinite Logistics Solutions Pvt Ltd, early this month.
The private equity and venture capital players are also very active in this space. Last week, Reliance Venture Asset Management has jointly invested around Rs 35-40 crore in Reverse Logistics Co. Two other venture capital funds, Mayfield India Fund and SIDBI Venture Capital Ltd, are also investing Rs 50 crore in Fourcee Infrastructure Equipment Pvt Ltd.