In a landmark deal, Hitachi Transport System Ltd of Japan, a unit of Hitachi Ltd of Japan, has acquired Flyjac Logistics Pvt Ltd, a leading domestic logistics major for Rs 250 crore. In an all cash deal, the 100% stake from the promoters would be bought by Hitachi Transport. Ambit Corporate Finance Pte Ltd is the sole advisor for Flyjac for the deal.
Deals in the logistics space appear to be gathering momentum. Only in January, Nippon Yusen Kaisha (NYK), one of the world’s largest logistic groups, picked up about 26% stake in Tata Steel subsidiary TM International Ltd, which handles bulk cargo such as coal for Tata Steel and other customers.
A source, familiar with the development, told VCCircle, "The strategic transaction with Hitachi Transport System will open the India-Japan business corridor for Hitachi-Flyjac combine. This new combination will also add large Japanese giants to the existing impressive list of Indian and European customer base of Flyjac.”
Japanese Hitachi Transport System has 10,416 employees across the globe. It has service revenue of $3.75 billion for the year ended March 2009. It is a global leader in third party logistics (comprehensive logistics services). It operates in India through a liaison office.
Flyjac has group strength of 1250 people with presence in 16 locations in India. It has a presence in 40 countries and is also the ground handling agent for AAI at Delhi & Chennai. Flyjac Logistics Pvt Ltd is founded by Lalit Jobanputra, AS Madhavan and AV Ravikumar. Flyjac, a total integrated logistics solutions service provider, was founded in 1990 as Flyjac Forwarders.
"This deal will trigger consolidation including strategic alliances & joint ventures in the otherwise unorganised freight forwarding sector in India," said a logistics space watcher.
With the global economy showing a sense of revival, the logistics companies have been firming up their plans for domestic as well as cross-border acquisitions. In recent deals, Transport Corporation of India (TCI), an Andhra Pradesh-based firm, acquired 51% equity stake in a JV Company, Infinite Logistics Solutions Pvt Ltd, early this month.
This year till date, nearly six M&A deals took place in the logistics space. Reliance Industries acquired minority stake in Deccan Cargo & Express, Aqua Logistics expanded global presence by acquiring Tag Logistics, CIT Logistics and AGI Logistics in China and Hong Kong while Nippon Yusen bought stake in TM International Logistics. In March, about $34 million worth PE deals took place in Indian logistics space.
“By actively pursuing M&As with logistics companies from four regions of North America, Europe, China and other Asian nations, we will strive to expand our global 3PL operations as a non-stop shop for logistics solutions both in Japan and overseas,” Tadamichi Sakiyama, chairman, Hitachi Transport had said in the company's annual report last year.