Private equity funds managed by Kuwait-based Global Investment House have acquired a significant stake in Reach (Cargo Movers), a surface transport company in India that dates back to 1971
Private equity funds managed by Kuwait-based Global Investment House have acquired a significant stake in Reach (Cargo Movers), a surface transport company in India that dates back to 1971.
The current management took over Reach in 2001 and changed its focus from being an agent for various transporters to providing logistics services, transportation of small and parcel consignments, and transportation of capital goods and construction equipment.
Reach provides logistics support for spare motor parts, engines, raw materials, finished products, project equipment, entire plant, sophisticated machinery, heavy transformers, oversized boilers and tankers.
Global’s private equity funds have invested USD5m in a significant stake in the Indian company, whose revenues and net profits have been rising at an average annual compound growth rate of 49 and 58 per cent respectively over the past four years. Reach is consolidating its position as a transport provider of surface transport to large corporates such as Tata Group, Cummins and Bharat Forge.
‘The purchase of a significant stake is an important step to strengthen our presence in the lucrative Indian market,’ says Shailesh Dash, senior vice-president and head of private equity at Global, adding that the investment is a stepping stone in acquiring assets in India’s logistics sector, one of the fastest growing segments of the country’s economy.
The Indian government plans to make significant investment in infrastructure and the logistics industry will be a direct beneficiary in the coming years. Reach’s management team and principals have spent more than 30 years in the industry and have extensive experience in a highly competitive market.
The Global private equity funds already have exposure to the Indian economy through an investment in Reliance Petroleum, which has more than doubled in value over the past 15 months. The private equity firm plans to help Reach explore synergies with other logistics companies in the region and evaluate adds-on purchase opportunities to help the firm expand beyond the region.
An investment company founded in 1998, Global Investment House has branches and affiliates in Bahrain, Dubai and Abu Dhabi, Jordan, Qatar, and Sudan and managed assets totalling KWD2.39bn (USD8.3bn) at the end of June. Its three private equity funds and one buyout fund evaluate opportunities in 17 different countries in the Middle East and North Africa as well as India and China and have total assets of more than USD1.5bn.
