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Nippon Express to acquire 22% stake in FSC

By Niranjan Mudholkar,

Added 20 September 2019

As part of this transaction, Future Supply Chain Solutions Ltd (FSC) will issue 37,89,350 shares to Nippon Express at a price of ₹664 per share (22% premium to the current market price).

mergers-acquisitions

Nippon Express and FSC plan to explore synergies between the two organizations.

Nippon Express Co., Ltd. acting through its subsidiary Nippon Express (South Asia & Oceania) Pte. Ltd. (Nippon Express), Japan’s leading global logistics player, has agreed to acquire a 22% stake in Future Supply Chain Solutions Ltd (FSC). This transaction is a combination of primary issuance and secondary purchase from an existing Investor.

As part of this transaction, FSC will issue 37,89,350 shares to Nippon Express at a price of ₹664 per share (22% premium to the current market price). Through this primary issue Nippon Express will hold 8.6% stake on a fully diluted basis and FSC will raise around ₹252 crores for funding its near-term growth plans.

Further, Nippon Express has informed FSC that they have entered into a share purchase agreement with institutional shareholder(s) of FSC to acquire 58,63,475 shares representing 14.6% of existing share capital. Both these transactions will result in Nippon Express owning a 22% stake in FSC (on a post money, fully diluted basis).

Nippon Express and FSC plan to explore synergies between the two organizations. FSC and Nippon Express will jointly evaluate leveraging Nippon Express’ competency in diverse sectors for the Indian market. FSC plans to leverage Nippon Express' Japanese and MNC clients for exploring new business opportunities in India, especially for 3PL and express logistics operations. Nippon Express will also have representation on FSC’s Board of Directors, which will further strengthen its Board through their strategic direction.

Commenting on this transaction, Mayur Toshniwal, Managing Director, FSC said, “We welcome Nippon Express, a highly respected logistics player globally, into the FSC family and are excited about the potential of this strategic partnership in creating a best in class supply chain service offering. Through this partnership, Nippon Express and FSC are well poised to derive significant synergies given their complementary skill sets and services offering, and gain a deeper foothold in the large and growing Indian logistics sector.”

FSC has convened an Extraordinary General Meeting on October 19th 2019 at Mumbai for obtaining the Shareholder approval. The above-mentioned transaction is subject to consents and approvals customary for such a transaction including shareholder approval.

As of June 30, 2019, FSC operations are run through 94 distribution centers across India, covering approximately 8.31 million sq. ft. of warehouse space. Its “hub-and-spoke” distribution model comprising 13 hubs and 132 branches across India.

Nippon Express was advised by GCA Corporation on this transaction.

END

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