In a bid to deepen its presence in the growing domestic logistics industry, Adani Logistics today announced that it will be acquiring Adani Agri Logistics from Adani Enterprises Limited in an all-cash deal at a proposed enterprise value of Rs 1,662 crore.
Adani Logistics is a 100 per cent subsidiary of Gautam Adani-led Adani Ports and SEZ Limited (APSEZ). The acquisition is expected to be completed by March, the company said in a release today.
“Adani Agri Logistics Limited is the largest agri-products logistics player with long term contracts and strong margins. This acquisition brings us one step closer towards our vision to be the leader in providing integrated logistics services in India and focus on developing hinterland logistics. It enables us to expand our total addressable market, enhance our network and create a value chain to handle all types of cargo in India,” Karan Adani, chief executive officer and Whole-time director of APSEZ was quoted as saying.
Post this acquisition, Adani Logistics will have access to 28 locations and seven trains of Adani Agri Logistics. Their combined business EBITDA will also double to Rs 200 crore, said the release.
Adani Agri Logistics has a market share of 45 per cent in the modern agri storage infrastructure. Adani Agri Logistics has also made significant inroads in the agri-infrastructure business by setting up grain storage silos and cold storage facilities. A service agreement has been inked between Adani Agri and Food Corporation of India (FCI) for handling FCI’s wheat. Under this agreement, state-of-the-art food grain storage and handling facilities are being set up across India.
The $11 billion revenue Adani Group, since the last few years, has chosen the inorganic growth route to expand its business. Adani Ports and SEZ Limited has ten strategically located ports and terminals representing 24 per cent of the country’s port capacity. Dhamra port, Mundra port, Ennore terminal, Hazira port and Vizhinjam port among others are its port facilities spread across India’s 7500 km coastline.
Meanwhile, brokerages are of the view that the acquisition augurs well for both the entities as Adani Logistics would get instant presence in several location as warehouses of Adani Agri are spread across while the latter will be able to develop the much needed logistics with far more ease.