The Blackstone Group has agreed to purchase a 10.4 percent minority stake in Indian logistics operator Allcargo Global Logistics for $60 million (€41 million).
The company said Blackstone’s investment will be a mix of equity shares purchased at 934 rupees each, a 31 percent premium compared with yesterday's closing price, as well as debentures and warrants, both of which are convertible to equity shares within or upon completion of 18 months after issuance.
Blackstone also intends to purchase additional shares of Allcargo on the open market but will keep total ownership below 15 percent, according to Allcargo.
The investment will be used to fund Allcargo’s expansion plans and will provide Blackstone with additional exposure to the fast-growing Indian economy.
Blackstone Advisors India chairman and managing director Akhil Gupta noted India’s “buoyant economic growth, improvements in infrastructure and a rationalisation of the country’s tax structures” as reasons for investment, according to a statement.
Blackstone’s previous investments in India include a $150 million investment in construction company Nagarjuna Construction, a $65 million investment in precision components company MTAR Technologies and a $165 million in garment exporter Gokaldas Exports.
Other recent logistics deals involving private equity firms include Global Infrastructure Partners’ and port operator PSA International’s purchase of a majority stake in Argentina’s International Trade Logistics and Fortress Investment Group’s $2.4 billion buyout of US transport company Interpool.
Allcargo is a private sector logistics operator. Its operations include container freight stations, inland container depots and less than container load consolidation.