The board of multimodal logistics solutions provider Allcargo Logistics Limited has approved a plan to acquire a 38.87% stake from its partner at an enterprise value of Rs 373 crore. Allcargo Logistics will own 100% of the contract logistics business through this acquisition.

The company’s board of directors approved the withdrawal of non-core customs clearance business and the sale of all equity. This move aligns with the group’s focus on its core business.

The purchase price is based on an agreement signed with ACCI’s joint venture partners in 2016. According to a statement released by the company, “this has proven to be a high-value accretive acquisition as the business has grown tremendously over the years”.

The acquisition “reflects the group’s vision for strong growth by creating effective synergies between contract logistics and express delivery,” the company said.

Group chairman Shashi Kiran Shetty said the acquisition would give Allcargo Logistics management control of the company and facilitate strategic decision-making.

Notably, Allcargo’s contract logistics business manages inventory and provides third-party supply chain solutions to Indian and international customers in the chemical, automotive, e-commerce and other industries. The business operates an area of ​​over 5 million sq. ft. and had an EBITDA of Rs 31 crore in Q3FY22-23.

According to a statement released by the company, the imminent acquisition of KWE’s stake in Gati will bring the two companies closer together and help them better leverage each other’s strengths, with Allcargo acquiring all the shares of the two corporate partners.

Allcargo is a market leader with a pan-India presence in the container freight terminal business, a leader in express logistics through its subsidiary Gati Ltd, and a strong presence in contract logistics and other businesses. The deal will pave the way for synergies across Gati’s courier business.

The company’s board also approved the sale of a smaller non-core customs clearance business. Allcargo Logistics will sell its 61.13% stake in the business for an enterprise value of approximately Rs 42 crore. Also, the company has declared an interim dividend of Rs 3.25 per share for FY23.