Adani Group Acquires Majority Stake In Snowman Logistics For Rs 296 Crore
Billionaire Gautam Adani’s port-to-power Adani Group acquired majority stake in Snowman Logistics Ltd. for Rs 296 crore to foray into cold chain logistics.
“The purchase price of Rs 44 per share represents a 3.2 percent premium to the market price of Dec. 27, 2019 and a 12 percent premium to 60-day average,” it said.
Adani Logistics will make a mandatory open offer at Rs 44 apiece under SEBI’s takeover norms for a maximum 26 percent of the public shareholding in the Snowman, according to a separate filing. The acquisition, subject to customary condition precedents, is expected to close by March 31, 2020.
Snowman is the market leader in cold chain logistics with over 30 percent of capacity among integrated organised cold chain service providers in India.
Gateway Distriparks sold its controlling stake as part of its asset sales to pare debt. It recently announced sale of Chandra container freight station for Rs 47 crore. The company, which had a gross debt of Rs 730 crore as of Sept. 30, targets to cut it by Rs 250-300 crore by March 2021.
The acquisition gives Adani Logistics platform to double its capacity in the next five years. The buyout is in line with the firm's strategy to move from port gate to customer gate.
Karan Adani, chief executive officer and whole-time director at Adani Ports and Special Economic Zone Ltd., said, “Cold chain is key product in customer gate strategy given India's consumer driven demand. We will double the capacity in next five years. With focus on increase in utilisation, higher realiaation from product mix and operational efficiencies, this vertical will help further improve returns of logistics business.”
Incorporated in 1994, Snowman is in the business of integrated cold chain logistics providing warehousing, distribution and value added services. With over 25 years of expertise, the firm operates 31 temperature-controlled warehouses at 15 strategic locations. The company’s infrastructure includes warehousing capacity of 1,04,343 pallets and 293 refrigerated vehicles.
Adani Logistics has expertise in handling varied customer across segments like retail, industrial, bulk, break-bulk, liquids, auto and grain handling. It currently operates 5 logistics parks, 55 rakes, 400,000 square feet of warehousing space, 5,000-plus containers, 0.9 million tonne of grain silos and nine inland waterways vessels.
(With inputs from PTI)