TNT Express concludes sale of Indian road business
TNT Express has completed the sale of its domestic road business in India to the private equity firm India Equity Partners. The sale took effect on December 30, with TNT Express looking to withdraw from the domestic Indian market in order to concentrate on its international business.
IEP, a firm based in Mauritius but with around $450m in investments focused within India, said the acquired business was one of the top four operators in the market, with a strong network, diverse client base and an “outstanding reputation for reliability, customer service and its service offerings”.
The company sees strong potential in the road-based express segment within India, describing it as one of the fastest-growing segments within the country’s logistics sector.
It said four companies contest 50% of the share of a INR 21bn ($396m USD) market that grew by more than 20% last year, but has “significant” barriers to new entrants – not least the difficulty establishing and maintaining a scheduled network.
Under its new ownership, TNT India’s road express business will come under IEP’s Logistics business led by chief executive Abhik Mitra.
Sid Khanna, chairman and managing director of IEP Fund Advisors said the acquisition was part of his company’s strategy to invest in logistics and infrastructure services companies.
“In the logistics sector, we see tremendous growth opportunities for mid-sized companies with the required management and capital, to scale rapidly and become market leaders,” he said.
IEP
Other than the TNT acquisition, IEP currently invests in three companies within its logistics portfolio – niche liquid logistics business Fourcee Infrastructure, cold chain transport specialist Swastik Roadlines (operating through the Coldex brand), and port management firm Ocean Sparkle.
It said it would work together with TNT to ensure a “seamless transition”. Senior management and “most” employees from the TNT India road express business will transfer to the new IEP unit, which is set to be TNT’s preferred partner in connecting its international shipments to domestic Indian delivery points.
KK Iyer, the former head of Accenture’s logistics business in India and now managing director at IEP Fund Advisors, said: “We see TNT’s domestic road express business as a first step in building out our logistics platform and intend to pursue other exciting investment opportunities in this sector.”
TNT Express said last month it was selling its domestic road express business after an “extensive” review of the unit’s prospects. It will continue offering inbound and outbound services for India via its global network, as well as continuing customer-specific services such as with healthcare clients.
Around 1,000 employees are expected to transfer to the new IEP unit.
