Unit of Indian conglomerate TVS buys S'pore logistics provider

Singapore

LOGISTICS service provider TVS Asianics, a unit of Indian automotive conglomerate TVS group, has acquired the freight forwarding and contract logistics businesses of Singapore company Pan Asia Logistics (PAL).

But the local holistic logistics provider's other operating subsidiaries, industrial real-estate development Pan Asia Logistics Investments (PALI) and niche logistics product Panalogs Projects, are not part of the deal, and will continue to be independently managed by founders German-born Christian Bischoff and Susan Tan.

PAL said TVS Asianics was focused on the freight forwarding and contract logistics business to complement their portfolio, and the other subsidiaries were never part of the deal.

Both companies declined to comment on the valuation of the acquisition, but The Business Times understands that TVS Asianics has an intended investment figure in Singapore of around US$100 million.

TVS Asianics posted revenue of S$340 million last year, while PAL had revenue of S$160 million.

Industry sources expect their combined revenue to increase to S$600 million this year, as TVS Asianics focuses on integrating the newly acquired assets.

Gerald Tan, who will remain as PAL's chief executive, said the acquisition will help the company accelerate the design of innovative logistics solutions for its customers.

Furthermore, the company added that the acquisition would be used to fund the digitalisation process across all operations, a renewal of all their systems, and expand their global reach.

Mr Bischoff, who will take an advisory role to the boards of both companies, said: "Now is the right time to drive the next level of development and growth, and to strategically position Pan Asia Logistics to capitalise on opportunities within the shifting global economic landscape by becoming an integral part of the TVS Asianics global network."

In terms of staff movement, the company said it currently does not forsee any changes in staff size, which stands at over 600 employees in countries like Germany, China and Thailand.

The buyer, TVS Asianics, is a joint venture with TVS Logistics Services. Both companies are units of TVS Group, a century-old private Indian conglomerate that reportedly has an annual revenue exceeding US$7 billion, with more than 60,000 employees across 59 companies. TVS Asianics was founded in 2014, is based in Singapore and has operations in 15 countries. The company provides an integrated supply chain network of commercial centres across Asia with links to Europe and the Americas.

Through this acquisition, TVS Asianics said it will double the company's global ocean and air freight forwarding volumes. The company will also obtain advanced technology-driven contract logistics and distribution capabilities throughout Asia, especially in Singapore and Malaysia.

James McAdam, TVS Asianics' chief executive said: "The acquisition of Pan Asia Logistics is a unique opportunity for TVS Asianics to complete its geographic expansion across Asia and complement its team of logistics professionals with Pan Asia Logistics' highly experienced management team and its more than 600 employees across Asia."

The acquisition comes after its other acquisitions of Australia's Transtar International Freight in 2015 and Spain's Nadal Forwarding last year. It said it is still on the lookout for other potential acquisitions.