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BW Businessworld

Gati Launches Itself Into Next Phase Of Growth

Gati's revenues are in excess of Rs 1,800 crores, with a variety of offerings, spanning from express distribution to 3PL operations.

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Gati Ltd, India's leader in express distribution and supply chain solutions, has offloaded a significant equity stake to Allcargo Logistics Ltd - India's largest integrated logistics solutions provider.

Founded by Mahendra Agarwal in 1989, Gati pioneered express distribution in India. He is credited as the visionary who heralded the start of the express logistics industry in the country and built the Gati conglomerate to create a logistics & supply chain solutions powerhouse, tapping into strategic growth verticals over the last 30 years. Today, Gati's revenues are in excess of Rs 1,800 crores, with a variety of offerings, spanning from express distribution to 3PL operations. It boasts of some of the largest corporate clientele, across industry verticals, amongst its vast customer base in India.

Agarwal has been scouting for an established strategic partner who could provide management and operational synergies, and launch Gati into its next growth phase, and build an enterprise so large that it has the scale to benchmark itself with best of global peers in express logistics.

Gati found Allcargo Logistics Ltd (Allcargo) an able and competent partner. Allcargo Logistics is the global leader in LCL consolidation through its wholly-owned subsidiary ECU Worldwide.

"This alliance strengthens Gati with more management bandwidth, operational synergies, cross-selling opportunities, and financial strength. Further, the alliance between Gati-Allcargo will also help consolidate Gati's position in the domestic logistics sector by adding capabilities that cover the entire range of logistics functions for its customers, and increase Gati's revenue potential manifold catapulting Gati-Allcargo to be the No 1 logistics leader in the Indian subcontinent", said Agarwal.

Kintetsu World Express (KWE) - part of the USD 10.3 Billion Kintetsu Group Holdings, Japan; which entered into a Joint Venture with Gati to form the Gati-KWE subsidiary in 2012, continues to remain strongly invested and will retain its existing association with Gati.

The change in Gati's shareholding and management control, with Allcargo coming on board as a majority shareholder, will not impact the regular day-to-day business operations in any manner including customers, employees, vendor partners, and other stakeholders; and will only help Gati emerge as an even stronger logistics brand in the future.

Systematix Corporate Services Limited acted as an exclusive financial advisor to the parties on the transaction.