DP World, NIIF JV to acquire PE-backed Continental Warehousing

Hindustan Infralog Pvt. Ltd, a joint venture between Dubai-based DP World and the National Infrastructure Investment Fund (NIIF), has agreed to acquire a 90% stake in Warburg Pincus-backed Continental Warehousing Corporation (Nhava Seva) Ltd, a media statement said.

Continental Warehousing's promoter Reddy family will retain a 10% stake in the company.

This is the first investment by Hindustan Infralog, which recently said it would invest up to $3 billion in ports, logistics and related sectors.

“As a global trade enabler, we aim to grow in complementary sectors of the global supply chain, which includes inland container terminals, freight corridors and logistics infrastructure. The acquisition of Continental Warehousing Corporation provides us with a scalable platform to accelerate growth in the rapidly evolving logistics sector in India,” Sultan Ahmed Bin Sulayem, group chairman and CEO at DP World, said in the statement.

Continental founder Adi Keshav Reddy said the deal will enable the company to enhance its value-added services to customers.

The transaction value was not announced but The Economic Times, citing people it didn't name, reported earlier that the deal was worth $400 million.

The deal will allow all of Continental Warehousing's investors to exit. These investors are Warburg Pincus, UAE-based private equity firm Abraaj Capital and International Finance Corporation, the World Bank's private-sector investment arm.

Abraaj, which had picked up a stake in Continental Warehousing in 2012 when it acquired Aureos Capital, was earlier looking to exit completely via a public listing of the company.

The company had filed for an initial public offering in September 2016. It got regulatory approval to go public in December 2016. The approval is valid for one year and lapsed in December 2017.

Warburg, which held a 40.4% stake in the company was planning to sell a third of its holding. IFC had backed the company only in 2015.

Continental Warehousing was founded in 1997 and provides services like warehousing, container freight stations, inland container depots, private freight  terminals and integrated logistics solutions. The company’s wholly owned subsidiary Delex Cargo India Pvt. Ltd provides door-to-door logistics solutions including freight forwarding, third-party logistics, express logistics and hub-and-spoke model of delivery across 54 locations in 40 cities.

In India, DP World has been operating container port terminals since 1997. DP World is present at six locations in India and also operates container trains connecting ports to the hinterland.

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