French firm CMA CGM buys strategic stake in LCL Logistix

Bengaluru/Mumbai: CMA CGM Group of France, the world’s third-largest container shipping company, has picked up a strategic stake in freight forwarding company LCL Logistix (India) Pvt. Ltd for an undisclosed sum.

CMA CGM has bought the stake from venture capital firm Tuscan Ventures Pvt Ltd. The financial details of the deal were not disclosed. Tuscan held a 15% stake in LCL Logistix, according to the website of LCL.

Mumbai-based Tuscan had invested in LCL Logistix in 2008.

CMA CGM has acquired the stake through its subsidiary CMA CGM Logistics, which specialises in freight forwarding and logistics solutions.

“LCL Logistix is a successful exit for Tuscan Ventures in an industry that has traditionally been plagued by discussions around lack of scale, infrastructure and exits for investors. For Tuscan this is a vindication of its strategy in the India logistics opportunity, where you can build and scale a platform through adverse shipping cycles and slowdowns,” said Shagun Kapu Gogia, founder of logistics and transportation focussed Tuscan.

“The decision to invest in LCL Logistix was in keeping with Tuscan’s strategic strengths and focus in the logistics space in India. The immediate opportunities were to deepen the service offering and strengthen the processes at LCL Logistix with the goal being to build a strong Indian integrated logistics service provider. The infusion of capital in conjunction with expertise that Tuscan’s core team brought helped LCL in transforming itself into one of Asia’s fastest growing, integrated, end-to-end logistics companies and supply chain solution providers.” Gogia added.

Mumbai-based LCL Logistix had revenue of $120 million for the fiscal year 2014. The company also operates three container freight stations near Jawaharlal Nehru Port (near Mumbai), at Haldia (West Bengal) and in Pipavav (Gujarat). The 25-year-old company has 42 offices in India and abroad.

In a statement, CMA CGM said the company will reinforce its position in India and will leverage LCL Logistix’s Indian network and its presence in Canada, in the US and in East Africa to accelerate its growth.

“Thanks to this strategic stake, CMA CGM Log expands both its product offering and its geographic coverage, including in emerging countries where logistics solutions demand is high,” the statement said.

In order to pursue the company’s development, its management team will be maintained, CMA CGM noted.

“LCL Logistix will provide significant impetus to CMA CGM Logistics in India and LCL Logistix will benefit from CMA CGM Logistics’ global network. There are several synergies between us that will benefit both the companies naturally”, said Unni Nair, chairman of of LCL Logistix.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.