Mumbai: Ambit Pragma today announced the sale of its majority stake in Pune-based Spear Logistics Private Limited, to FM Logistic, leading international logistics provider. Ambit Pragma, a Small Cap (SME) Growth and Buyout fund with approximately US$ 150 million under management, had invested in Spear in 2009.
Since its inception in 2001, Spear operates in the ‘Contract Logistics’ segment and has emerged as India’s largest independent contract logistics player, offering long-term inventory and warehousing management business. The company has a pan-India presence, managing 75 warehouses (2.9 million square feet) across 23 cities with over 1,600 employed professionals. Through the acquisition, FM Logistic aims to bring international practices, advanced working tools and latest technologies to the Indian market. Spear’s FY16 revenues stood at roughly Rs. 135 crore (18 million Euros), significantly up by over 5 times since Ambit Pragma’s investment.
Operating for almost 50 years with headquarters in France, FM Logistic is a leading provider of warehousing, transportation and co-packing services as its expertise spreads across consumer goods, retailing, perfume/cosmetics, industrial and health markets. Founded in 1967, the group has revenues of over a 1 billion Euros with operations across 12 countries – importantly its overseas operations contribute over 60% of their revenues.
Commenting on the deal, Mangesh Pathak, Partner, Ambit Pragma, said “Only about 8-10% of the market is catered to by organized players like Spear. While the Indian market is not yet as organized and sophisticated as some of the global counterparts, we are pleased to have witnessed Spear’s growth over the years. I am confident that FM Logistics global expertise in this domain will help Spear move to the next orbit of growth. “
Adding further, Gautam Dembla, CEO, Spear Logistics, said, “We have benefitted immensely from the strategic and operational inputs received from Ambit Pragma over the years. Our next stage of growth will benefit immensely from this partnership with FM Logistic, and with the advantage of their global expertise we are confident of becoming a market leader in the Indian organized logistics space.”
In India the contract logistics industry is a US$ 2.5-3.0 billion market. The organised market is estimated to be growing at 15-20% annually
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