Logistics and supply chain services company Delhivery announced the acquisition of Bengaluru-based rival Spoton Logistics. The announcement comes months before Delhivery’s public market debut to be announced before March 2022.
The acquisition will strengthen the consumer and business portfolios for the two companies.
"This development is consistent with our objective of being growth-oriented and building scale in each of our business lines," Sahil Barua, Delhivery CEO, said in a statement. He added that it will help them strenghten their B2B capabilities by combining Delhivery's truckload business with that of Spoton's.
"More importantly, we are well placed to provide benefits of synergies between our B2C and B2B express businesses to the customers of both Delhivery and Spoton, and further enhance our end-to-end supply chain capabilities," said Barua.
Samara Capital and Xponentia Capital said in a statement that they have exited Spoton, "exceeding typical internal rate of return (IRR) and money multiple expectations". However, they didn't specify the financial details of the transaction.
The statement added that Spoton acquired a supply chain solutions business RTS and built two new verticals focused on air express and non-corporate customers in the last three years. These initiatives helped company grew its net sales and operating profit at a CAGR of 24% and 30%, respectively, it said.
Bengaluru-based Spoton was formed in late 2011 when India Equity Partners bought the domestic road business of Dutch freight and logistics giant TNT Express in India. India Equity Partners exited Spoton in 2018 when the Samara Capital led consortium bought it for Rs 550 crore.
"Spoton is known for its focus on customer relationships and service quality, professional management and technology and engineering, which are values shared by Delhivery as well, and that sets us up to together be one of India's leading logistics companies," Abhik Mitra, Managing Director, Spoton Logistics, said.
Delhivery is likely to sell a 10-15% stake for $500-600 million through the planned initial public offering (IPO), Mint reported on 9 June. This would value the startup at around $4 billion.
Delhivery’s rivals include FedEx, Blue Dart, Ecom Express, Gati and XpressBees.