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Monday, July 22, 2024

Pristine Logistics secures DLI India with a stock-cash merger

Pristine Malwa Logistics Park Pvt Ltd (Pristine Malwa) has recently completed a significant acquisition, purchasing Distribution Logistics Infrastructure Pvt Ltd and its associated group companies (DLI India) from Infrastructure India Plc, a London-listed company traded on the Alternative Investment Market (AIM). This transaction, which involves a combination of stock and cash, holds strategic importance for Pristine Malwa, positioning the rail-focused logistics firm for further expansion as India’s national rail system aims to increase its share of freight transportation from 27 percent to 45 percent by 2030, aligning with efforts to reduce carbon emissions.

Pristine Malwa Logistics Park is the parent company of Sical Logistics Ltd, a Mumbai-listed entity, and its holding company, Pristine Logistics and Infraprojects Ltd. The acquisition was formalized through Share Purchase and Shareholders Agreements, with DLI India, Infrastructure India Plc (IIP), and IIP’s subsidiary in Mauritius, DLI Mauritius. While Pristine Group representatives declined to comment on the deal, Infrastructure India Plc was not immediately available for comment.

DLI Mauritius, in this transaction, transferred 100 percent of DLI India’s equity to Pristine Malwa Logistics Park, effectively making it the sole owner of all of IIP’s logistics entities operating within India. However, this acquisition is still subject to the fulfillment of customary conditions precedent and approval from DLI India’s lenders.

The acquisition structure is a combination of shares in Pristine Malwa Logistics Park and a cash component. The specific financial details will be determined at the deal’s completion, with the entire transaction expected to conclude within 60 days. Once the deal is finalized, Pristine Malwa Logistics Park will emerge as the ultimate holding company for both Sical Logistics and DLI India.

Pristine Logistics & Infraprojects was founded in 2008 by Amit Kumar and Rajnish Kumar, both former officers of the Indian Railways Traffic Service (IRTS). The company currently operates five logistics parks, including rail-linked logistics parks featuring private freight terminals, inland container depots (ICDs), and a dry port. These facilities are strategically located in key industry clusters across various districts, including Kanpur, Ludhiana, Patna, Siliguri, and Birgunj (Nepal). Of particular note, the Birgunj ICD is the sole rail-linked container terminal connecting Nepal, facilitating vital trade in the region.

Pristine Logistics & Infraprojects possesses substantial capacity, with its facilities capable of handling 648,000 twenty-foot equivalent units (TEUs) annually. Additionally, the company owns warehousing space measuring approximately 905,000 square feet and manages 2,624 domestic standard containers, 395 dwarf containers, 390 trailers, and 43 rakes. The company also holds a Category I license from the Indian Railways, enabling it to operate container trains for export-import operations on multiple routes, such as the National Capital Region/Ludhiana to Mundra/Pipavav route, Kanpur to Jawaharlal Nehru Port/Mundra route, Siliguri to Kolkata route, and Visakhapatnam/Kolkata to Birgunj route.

With the acquisition of DLI India, Pristine Logistics & Infraprojects is poised to become the largest private sector container train operator, with a terminal footprint covering most of the significant catchment areas. DLI India owns Integrated Logistics Park (ILP) cum Private Freight Terminals (PFTs) in Nagpur and Bangalore, with another ILP under construction in the Palwal region of the National Capital Region (NCR). In addition, DLI India owns 120 acres of land in Chennai and operates a warehouse facility in Hassan, Karnataka. As a Category 1 container train operator license holder, DLI India deploys ten rakes at its Nagpur facility and offers various logistics services, including Indian Railways wagons handling, inland container depots, and bonded warehousing. This strategic integration with Pristine Group will enable further expansion across India.

The acquisition of DLI India promises to result in significant synergies for Pristine Logistics, Sical Logistics, and DLI. The Pristine Group’s expansion efforts are not limited to India; they have been expanding across India and in neighboring countries. Their recent achievements include winning bids for Gati Shakti Cargo Terminals (GCTs) in Rewari and Kanpur on the Dedicated Freight Corridor (DFC) network, demonstrating their commitment to enhancing terminal presence.

Furthermore, the company recently announced a partnership with Summit Alliance Port Ltd (SAPL), an entity listed on the Dhaka and Chittagong Stock Exchanges, to explore opportunities in neighboring Bangladesh, with a focus on the development of rail-linked ICDs and CFSs. These initiatives are aligned with their overarching goal of expanding their presence in the region.

Earlier in the year, Pristine Logistics & Infraprojects acquired Sical Logistics, a Mumbai-listed company, for approximately Rs400 crores under India’s bankruptcy law. Sical Logistics operates container trains, container freight stations, third-party logistics (3PL), and warehouse management, with a strong presence in South India, including locations such as Ennore, Mangalore, Tuticorin, Chennai, and Visakhapatnam Port, where they conduct stevedoring operations.

This acquisition not only strengthens Pristine Group’s presence in South India but also bolsters their overall logistics capabilities, making them a significant player in the Indian logistics landscape.

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