Future Buys Snapdeal’s Logistics Arm For Rs 35 Crore
Future will fully acquire Vulcan Express in an all-cash deal valued at Rs 35 crore.
Kishore Biyani's Future Supply Chain Solutions today said it will fully acquire Snapdeal's logistics service provider Vulcan Express Pvt Ltd in an all-cash deal valued at Rs 35 crore.
Future Group Founder and Chairman Kishore Biyani said in a statement that through Vulcan, the company plans to boost its last mile capabilities and also offer state-of-the-art solutions to its e-commerce and retail clients.
Snapdeal Chief Strategy and Investment Officer Jason Kothari said: "Similar to our recent sale of FreeCharge, we believe Snapdeal's sale of Vulcan Express to Future Group is a successful deal for all three parties."
The statement also quoted Kothari as saying that the company "divests off an asset that is non-strategic in nature for Snapdeal 2.0, allowing it to focus its capital and management on its core e-commerce business; Future Group gains high-quality pan-India end-to-end e-commerce logistics capabilities, and Vulcan secures a great new home for its business, including its team".
Future Group has been on an acquisition spree in the recent past. In October last year, Future Retail executed share purchase agreement (SPA) with Shoppers Stop for its Rs 655-crore acquisition of Hypercity Retail in stock-and-cash deal.
Last week, Future Retail said it will fully acquire Travel News Services India (TNSI) in a Rs 100 crore deal, a move which would help the company to further consolidate its retail business.
Metta Capital Advisors acted as the financial advisor to Future Supply Chain for the transaction. Future Supply Chain is present pan-India, with 44 warehouses, 14 logistics hubs, 106 branches, and over 4.2m square feet of warehousing space.
In July last year, Snapdeal had sold its payment wallet Freecharge to Axis Bank for Rs 385 crore, almost 90 per cent lower than what it had paid for the firm in 2015.
In an internal mail to employees, Vulcan Express CEO Hardeep Singh said: "This association is being recognised to be one of the most significant developments in the logistics industry in India... Vulcan's capabilities will be of big value to Future Supply Chain in enhancing its footprint and services".
Formed in 2014, Vulcan provides end-to-end logistics services pan-India and services 2,000 pin codes in 100 cities.
The deal with Future Group will help Snapdeal, which is looking to shed its non-core assets in a bid to survive in the hyper-competitive e-commerce market that includes giants like Flipkart and Amazon.
Last year, Snapdeal had rejected Flipkart's acquisition offer -- which was being orchestrated by Japanese conglomerate SoftBank -- and said it would instead pursue an independent strategy that it called Snapdeal 2.0.