IPO-bound Delhivery, a new-age domestic logistics giant and supply chain firm, is in advanced discussions to acquire a controlling stake in Bengaluru-based rival express logistics player Spoton Logistics, people familiar with the matter told Moneycontrol.
Delhivery is backed a long list of marquee investors such as Softbank, Tiger Global Management, The Carlyle Group , CPPIB, Fidelity and GIC. It was valued at around $3 billion post its latest fundraise of $277 million.
“Prior to its listing , Delhivery wants to build scale via this proposed buyout. Spoton is complimentary to Delhivery’s business and is a suitable tuck in acquisition,” said one of the persons cited above. The discussions may or may not necessarily fructify into an eventual transaction, he added.
Spoton is promoted by private equity firms Samara Capital and Xponentia Fund Partners.
“Talks between both parties have been going on for several months and there seems to an agreement now in terms of the deal valuations. The deal will facilitate an exit for Spoton’s private equity investors and an official announcement is likely next month,” a second person told Moneycontrol.
A third person said Delhivery is more of an e-commerce logistics player while Spoton is primarily a trucking and road logistics player. "So this acquisition will bolster Delhivery’s traditional wing as well. Spoton’s B2B backend capability is also something of interest to Delhivery.”
All the three persons above spoke to Moneycontrol on the condition of anonymity.
Delhivery declined to comment in response to an email query from Moneycontrol. We are awaiting email responses from Samara Capital, Xponentia Fund Partners and Abhik Mitra, the MD of Spoton Logistics and have sent multiple reminders. This article will be updated once we hear from them .
In August 2018, a consortium of Samaara Capital and Xponentia Fund Partners purchased Spoton Logistics for around Rs 550 crores. PE firm India Equity Partners completely exited the firm with this deal.
THE DELHIVERY STRATEGY
In an interview to the Economic Times dated June 7, 2021, Delhivery co-founder and chief executive Sahil Barua indicated that the firm plans to list within the next 6 to 8 months and raise a primary issue in the range of $400 mn to $500 mn.
“We are going to be more acquisitive than we have been in the past. It is because there is a mismatch on valuation. We are not going to buy anything for $100 million,” he added.
Recently another unicorn, namely Pharmeasy acquired a majority stake in listed diagnostics player Thyrocare for Rs 4,546 crores ahead of a proposed IPO.
Founded in 2011 by Barua, Mohit Tandon, Bhavesh Manglani, Kapil Bharati and Suraj Saharan, Delhivery reported a loss of Rs 284 crore during the financial year 2019-2020. It came down from Rs 1,781 crore in the financial year 2018-2019. The revenue increased by 74 percent to Rs 2,986.4 crore during the financial year 2020.
A CLOSER LOOK AT THE TARGET
Spoton Logistics started its journey in 2012, when India Equity Partners bought the domestic business from TNT India. It has a team of more than 1600 plus employees and operates a pan India network covering 300+ locations and over 22,000+ pin codes. It has 13 major depots and 35 transit hubs to facilitate timely and secure movement of goods. It serves an array of sectors viz. Hi-Tech, Automotive, Engineering, Pharmaceutical, Electronics & Electricals and Lifestyle & Retail.