Adani Logistics Ltd, a wholly-owned unit of Mumbai-listed Adani Ports and SEZ Ltd, will buy Adani Agri Logistics Ltd in an all cash deal at an enterprise value of Rs 1,662 crore.
Adani Agri Logistics Ltd is the agri-logistics unit of Adani Enterprises Ltd and the transaction is expected to be closed by March. The acquisition is a strategic move by India’s top private port operating firm to lead the integrated logistics services market with focus on hinterland logistics, a company statement said.
Adani Agri Logistics runs storage silos and rail transportation of food grains by rail with 1.58 million metric tonnes (MMT) of fully contracted capacity comprising seven trains and 28 storage / handling infrastructure facilities across 10 states. It has long term (20-30 years) guaranteed offtake contracts on use or pay basis with 70 per cent plus EBITDA margins.
Adani Agri Logistics plans to double infrastructure capacity in the next 3 years and tap the new 12.5 MMT infrastructure market as well as opportunities such as conventional storage conversion, among others. The combined business would also benefit from leveraging significant opportunity for handling multiple commodities and transportation.
“Adani Agri Logistics is the largest agri-products logistics player with long term contracts and strong margins. This acquisition of AALL brings us one step closer towards our vision to be the leader in providing integrated logistics services in India and focus on developing hinterland logistics. It enables us to expand our total addressable market, enhance our network and create a value chain to handle all types of cargo in India,” said Karan Adani, Chief Executive Officer and Whole Time Director of APSEZ.