Four s fortnightly logistics track 14th february - 27th febriary 2012

FOUR-S Consumer 14th Feb‘12 –27th Feb‘12
(Soft) Track

LOGISTICS TRACK
Fortnightly Update on Indian Logistics Industry

News of the week Content

Infrastructure Fund Of India Exits Logistics Firm Gati
News of the week 1
Infrastructure Fund of India LLC, a private equity fund
managed by AMP Capital Investors, exited its investment
in logistics services provider Gati Ltd by selling nearly 6% Investment Activity 2
stake through the open market earlier this month. The
stake was sold for an amount between ` 170mn and `
210mn, according to estimates. AMP Capital invested in News Update 3
Gati in 2006, acquiring 12% stake for $15mn or ` 664mn.
It also picked up additional stake from the markets in
2009. Loss-making Gati Ships, owns four container Event Update 4
vessels, fetching a valuation of close to ` 2bn according
to industry analysts. Bernard Schulte, which manages a
fleet size of more than 650 vessels, operates in 25 Global News Update 5
countries.

… in talks to sell stake in shipping arm to Bernhard Stock Market Updates 7
Schulte

Hyderabad-based logistics major Gati is in talks with
Peer Benchmarking 8
German ship-management company Bernhard Schulte to
sell a strategic stake in its loss-making shipping business
to raise cash to tide over the financial crisis. Bernhard
Schulte will acquire significant stake in Gati's demerged About Four-S Services 9
shipping business, Gati Ships, helping it to charter
container vessels to capitalise on the growing cargo trade
emerging out of India. Founded in 1989, Gati has more Four-S India Logistics Report – 2012
than 3500 employees covering 622 out of the 626 Four-S is launching comprehensive report on
districts in India. It has over 4,500 vehicles on the road, Logistics Space. The report presents current industry
s trends and snapshot of all key segments in Logistics
excluding its fleet of refrigerated vehicles, container & Supply Chain Industry along with profiles of
shipping vessels and world class warehousing facilities interesting listed and unlisted players in the space.
across India. The report is useful for Board members & Senior
Management of Logistics companies, PE Fund
Managers and other investors. To book your copy,
please write to Seema Shukla at seema@four-s.com.

Research Desk
Four-S Services is India's leading provider of high-end research, financial consulting and Investment banking services. We have executed projects for
prestigious Indian as well as global corporations, investment banks, private equity funds, venture capitalists and hedge funds including India’s Top 5 PE
Funds. For further information, please contact Seema Shukla at seema@four-s.com or reach us as http://www.four-s.com

Four-S Logistics Track
Investment Activity

PE Deals in 2011
Amount
Date Investor Target Stake (%) Strategy
($ mn)
6-Jan India Equity Partners Foursee Infrastructure Equipments Ltd. NA 10.0 Growth
23-Mar Infrastructure India Holdings Fund LLC Aegis Logistics 6.4 15.1 PIPE
11-Apr Warburg Pincus Continental Warehousing Corporation NA 100.0 Late
22-Apr Fidelity Growth Partners Transpole Logistics NA 13.5 Growth
5-May Mumbai Angels MVS Efarms 25 NA Early
24-Jun IL&FS PE JICS Logistics NA 8.8 Growth
4-Jul Rajasthan VC Fund Leeway Logistics NA 3.3 Early
5-Jul Standard Chartered PE Redington India 10.0 81.1 PIPE
5-Jul ECL Finance Ltd. Redington India 2.0 16.2 PIPE
19-Aug Ascent Capital Karaikal Port NA 30.0 Growth
13-Dec India Equity Partners TNT Express NA NA Buyout

Mergers & Acquisitions in 2011

Amount
Date Investor Target Stake (%) Business
($ mn)
19-Jan TVS Logistics MESCO (US) 100 NA Logistics Services
16-Feb Infrastructure India Plc Vikram Logistics & Maritime Services 37.39 NA Tranportation
26-Apr Aqua Logistics Ltd Nikkos Logistics 70 NA Logistics Services
29-Apr SBS Holdings Atlas Logistics 80 33.3 Logistics Services
12-Jul Royal Vopak CRL Terminals 100 61.8 Liquid Storage
31-Oct Vikram Logistics ETA Engineering and its sub. Freightstar NA 14.4 Multimodal Logistics
12-Dec IL&FS Transportation Networks Ltd. Chongqing Yuhe Expressway Co Ltd. 49 NA Road Transport Infra
14-Dec Future Supply Chain Solutions Transmart India NA NA Warehousing

PE Deals in 2012
Amount
Date Investor Target Stake (%) Strategy
($ mn)
6-Jan General Atlantic Foursee Infrastructure Equipments Ltd. NA 20.8 Growth
23-Feb IDFC PE StarAgri Warehousing & Collateral Management NA 30.0 Growth
23-Feb Global Super Angels Chhotu.in (Santa Claus Couriers Pvt Ltd) NA NA Angel

Mergers & Acquisitions in 2012
Amount
Date Investor Target Stake (%) Business
($ mn)
1-Feb Oil Field Warehousing & Services (OWS) Raamns Shipping & Logistics NA NA Logistics Services

Source: Four-S Database

About Four-S Services
Four-S Services is India's leading provider of Research, Financial Consulting and Investment Banking services with offices in Gurgaon, Mumbai and
Bangalore. We have a proven track record of consistently delivering high quality solutions, enabling our clients to improve the effectiveness of decision
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News Update

Logistics Company Chhotu.in Raises Funding From Global - activities such as development of ports, logistic hubs and
Super Angels special economic zones. The third cluster will include its
business of power generation and transmission.
Santa Claus Couriers which operates the e-commerce logistics
company Chhotu.in, has raised an undisclosed amount of TVS Logistics to sell motor factor
funding from Global Super Angels. The company intends to
use the money raised to expand its operations to more cities TVS Logistics, the parts warehousing and logistics business
and hire more people. Started in Jan 2011, Chhotu.in is a owned by the TVS Group of India, has agreed the sale of its
Delhi-based online logistics company which provides last mile Globe Transport Products. Globe is a commercial vehicle
logistics for various e-commerce companies including motor factor specialising in truck parts and components and
HealthKart, LensKart, Zovi, UrbanTouch, Fashion And You, was launched in 2002 with a single branch in Oswestry. The
99labels.com, Myntra and Healthcar.com. It also provides business was purchased from its management by the
other services like reverse logistics, Cash On Delivery and Multipart Group in 2009, and has since expanded with seven
offline payment collection. The company claims to be branches located in Oswestry, Crick, Cardiff, Warrington,
handling around 800 transactions on a daily basis, with a Birmingham, Sheffield and Avonmouth. Globe is being
monthly transaction size ranging from ` 7.5mn to ` 10mn. It purchased by TVS Europe’s former chief executive, Chris
currently has more than 100 employees on board. Gateley. Gateley led the buyout of Multipart Group, including
Globe, from the Imperial Group and subsequently oversaw its
AllCargo Logistics begins corporate recast acquisition by TVS in 2010. He stood down from his TVS role
during 2011 and has since then been assisting the
AllCargo Logistics Ltd has set in motion a corporate organisation with its European development plans.
restructuring move aimed at de-merging its Indian and global
businesses into two separate entities, each getting a true Aegis Logistics looks at doubling Pipavav port investment
reflection of the business and standing in the market. The de-
merger, which may take four to five months to take shape, Aegis Logistics, a gas and liquid fuel logistics concern has plans
will see the parent company retain its listing in India and the to increase its proposed investment in Gujarat Pipavav Port.
new entity, which will handle the global less-than-container- The company had delineated an investment of ` 4 bn in 2010
load (LCL) operations, get a new listing either in India or which it plans to enhance to ` 10 bn, driven by the growth
overseas, but headquartered in India (Mumbai). The company potential in the port. The investment entails setting up of a
spread wings globally after it acquired European firm, ECU tankage facility at the port that would span across a period of
Line, in 2006, making it the second largest NVOCC (non-vessel 3-4 years. Capital expenditure by Aegis for the year 2013
owning common carrier) in the world. Essentially, the de- would be segregated into ` 650 mn at Haldia and ` 1.25 bn at
merger will re-shape the ECU arm into a new entity. This Pipavav for liquid facilities and another ` 250 mn for LPG
business currently handles a throughput of 3.5mn cubic facilities. The second part of the capex would be devoted to
metres, with 160 offices sprinkled across 60 countries and one Phase II and III of Pipavav for its LPG facilities. In 2010, Aegis
transhipment hub in each continent. It has 85 smaller LCL had announced to develop 600,000 kilolitre (kl) oil terminal
companies that AllCargo acquired over the years. complex at an investment of ` 4 bn. It had entered into a
sublease deal with the operator of the port, APM Terminals
Adani Group to consolidate under three verticals: resources, Pipavav, to set up a global oil and petrochemical storage
logistics and energy complex across 100 acre of land. This 100 acre storage
complex combined with potential of bigger ships calling at
Gujarat based diversified infrastructure player Adani Group is Pipavav port due to deeper draft given opportunity to
consolidating businesses under three verticals as it seeks to enhance tankage facility for Aegis.
gain a leaner structure to pursue global ambitions better.
According to Gautam Adani chairman of Adani Group, which Shipping Ministry Signs MoU with Ennore Port Limited
has grown to $6 bn size in the last 24 years the company A Memorandum of Understanding (MoU) setting out the
needs to integrate by specifically laying out core areas of performance targets for 2012-13 for Ennore Port was signed
focus. The company would be bringing all its businesses under between the Ministry of Shipping and Ennore Port Limited
three main verticals or clusters: resources, logistics and (EPL). The MoU for 2012-13 has enhanced physical and
energy. While under resources, the group will house its coal financial targets for the company. The Cargo throughput targ-
mining and oil & gas operations; under logistics it will have -
Research Desk

-et has been set at 16 mn Tonnes and gross sales have been put SITL 2012: Indian ports should be run like corporate entities
at ` 2.1bn for Excellent Grade. Having a paid up equity of ` 3bn,
against the authorized capital of ` 5bn, Ennore Port has been A delegation of transport and logistics industry veterans was
consistently a profit making company and has paid a dividend of in Mumbai for SITL 2012. It was a three-day interactive
` 74.1mn crores to the Government of India and ` 37.1mn to session-cum-seminar for the aforementioned industry during
Chennai Port Trust, who are its shareholders, for the year 2010- 23rd Feb to 25th Feb. According to European delegates, India
11. has a long coastline and a number of ports, but they will
become a lot busier and be able to match up to international
Essar Shipping inducts new mini cape vessel standards only when the port authorities and the Ministry of
Shipping start running them like corporate entities and not as
The Ruias-owned Essar Shipping inducted its second mini-cape mere infrastructure facilities. The semi-privatisation of ports
vessel, as part of its on-going $1bn ship acquisition programme has been taking place in Europe for a couple of decades now.
in the next two years. The new vessel is the second in the series This is what India could learn from European experience. The
of mini-cape bulk carriers that are being built for the company concerned ministry and the private sector should meet and
at STX Dalian shipyard — the remaining four will join the Essar work out the modalities for public-private partnership in the
fleet in the next four months. This relatively new category of port sector. According to the knowledge partner KPMG, India
vessels, which is in between a cape size and supramax size ship, is an emerging logistics market with current size of $84bn
can be berthed at ports having relatively shallower drafts of which is estimated to touch $112bn in 2014.
about 13.7 metres, but with a higher cargo carrying capacity.

Four Soft bags new deal from Flowerport Logistics

Four Soft has announced that it has signed significant deal with
Flowerport Logistics, a leading Netherlands based logistics
solutions provider. As per the deal, Four Soft would offer its
integrated freight forwarding solution, 4S eTrans SME. The
contract was executed through Four Soft Netherlands BV,
Dordrecht, a subsidiary of Four Soft, India.

Global News Update

Shipping group Moller-Maersk sees 2011 profit slide, grim Business of Sprint Logistics Acquired by Aperion
outlook Management

Denmark’s A.P. Moller-Maersk A/S, the world’s largest container Aperion Management, a New York-based middle-market
carrier announced that that full-year profits fell 36% due to private equity firm, has acquired the municipal solid waste
lower rates, particularly on Asia-Europe routes, and warned the transfer station management and transportation business of
outlook was grim. The earnings dropped 36% to 18.1 bn kroner Sprint Logistics for an undisclosed amount. Established in
($3.3bn), despite a 2% rise in revenue to 322 bn kroner, as 1992, Sprint Logistics is a provider of transfer station
lower freight rates offset the impact of higher container management and transportation services in the Houston,
volumes. A.P. Moller-Maersk’s subsidiary Maersk Line is the Texas market. The company will be rebranded Stella
world’s largest container carrier with a fleet of more than 500 Environmental Services.
vessels.
Roadrunner Transportation Systems acquires Capital
Kerry Logistics obtains Spanish joint venture Transportation Logistics

Kerry Logistics has completed its acquisition of Kerry Salvat Roadrunner Transportation Systems acquired all of the
Logistics S.A., its former Spanish joint venture. The Hong-Kong outstanding capital stock of Capital Transportation Logistics,
based 3PL procured the remaining shares of the firm from located in Nashua, N.H. The purchase price of $6.25 mn was
partner Salvat Logistica, S.A.. Terms of the deal were not financed with borrowings under Roadrunner's credit facility.
disclosed. Spain has been a key market for Kerry Logistics since CTL is a non-asset based TMS provider offering primarily
2005. In addition to forwarding significant freight volumes transportation management solutions on less-than-truckload
between Spain and Asia, Kerry has provided its Spanish freight, in addition to truckload brokerage and freight
customers with the means to sell their goods in Asia.
Research Desk

-ght bill audit and payment services. CTL uses a Web-based
system that allows clients to optimize carrier selection, dispatch
and track shipments, generate invoices, create custom reports,
and perform improvement analysis. Both are the US based
companies inolved into supply chain management. In 2011, CTL
generated net revenues of approximately $6 mn.

Panalpina Appoints New CFO And Regional CEO Americas

Panalpina announced two key executive hires. Robert Erni (45)
is to become the new Chief Financial Officer of the Group.
Ferdinand Kurt (59) is to become the new regional CEO for the
Americas. Both have an extensive track record in the freight
forwarding and logistics industry.

Cold chain logistics company CryoPort secures $5m private
placement

US cold chain logistics company CryoPort has closed a private
placement with various investors for $5m.

Research Desk

Stock Market Update

As on 24th February 2012 Market Cap Price Percentage Change (%)
(In ` mn) (In `) 1W 1M 3M 6M 12M
Container Corporation of India 129,801 998.60 2.2% 11.1% 9.1% 6.6% -8.6%
Blue Dart 45,139 1,902.35 7.5% 12.2% 29.3% 17.3% 90.7%
Great Eastern Shipping 36,062 236.80 -12.7% 3.3% 9.9% 0.7% -3.4%
Shipping Corporation of India 32,792 70.40 -8.6% 18.1% 20.0% -14.7% -29.4%
Essar Ports Ltd. 27,008 65.80 -5.9% 2.8% -5.7% -9.6% -
Allcargo Logistics 17,905 137.15 -3.6% -0.3% 11.9% -9.4% -3.5%
Gateway Distriparks 16,180 149.50 3.3% 15.0% 18.1% 14.4% 30.0%
Arshiya International 8,786 149.35 -7.9% 8.2% 2.7% 11.4% -19.2%
Mercator Ltd. 6,759 27.60 -11.1% 21.1% 30.2% 10.8% -19.8%
Aegis Logistics 5,513 165.05 -2.7% -1.7% 19.5% -10.9% -42.8%
Transport Corporation of India 4,941 67.95 -5.5% 3.6% 7.9% -14.5% -28.3%
Sical Logistics 3,812 68.55 -1.2% -0.5% -2.5% -4.6% -6.9%
Aqua Logistics 3,735 12.45 4.2% -0.4% -12.9% -12.0% -28.0%
SEAMEC Ltd. 3,143 92.70 -7.5% -0.3% -0.6% -7.0% -12.2%
Gati 3,104 35.85 -10.3% 4.5% 31.6% -37.1% -30.6%
Varun Shipping 2,873 19.15 -6.6% 3.8% 16.4% -3.5% -29.7%
NSE Nifty - 5,429.30 -2.4% 5.9% 14.2% 11.1% 3.2%
BSE Sensex - 17,605.82 2.0% 7.5% 9.4% 4.0% -6.0%
ET Logistics Index - 16,729.41 -0.3% 10.6% -1.3% -5.4% -7.8%
ET Shipping Index - 7,226.60 -6.3% 1.2% 13.7% 1.3% -3.4%
Baltic Dry Index (BDIY:IND) - 718.00 0.1% -11.0% -60.4% -55.2% -42.2%

Baltic Dry Index

Source: Baltic Exchange

Road Freight Index

Source: Transport Corporation of India

Research Desk

Results Update – Last Quarter Ended 31st December 2011
All figures in ` mn

Company Revenue EBITDA PAT Margins Q3 FY’12
Q3 FY’11 Q3 FY’12 YoY Q3 FY’11 Q3 FY’12 YoY Q3 FY’11 Q3 FY’12 YoY EBITDA NPM
Aegis Logistics 7,314 11,026 51% 223 (687) - 122 (576) - -6% -5%
Mercator Lines 7,777 11,001 41% 1,357 1,698 25% 16 234 1406% 15% 2%
CONCOR 9,711 10,462 8% 2,807 2,774 -1% 2,285 2,412 6% 27% 23%
Shipping Corp. of Ind. 8,889 9,789 10% 1,612 (1,291) -180% 1,231 741 -40% - 8%
Allcargo 7,039 8,116 15% 781 1,048 34% 567 559 -1% 13% 7%
GE Shipping 6,111 7,643 25% 2,574 2,852 11% 1,175 875 -26% 37% 11%
TCI 4,444 4,644 5% 335 360 7% 118 135 14% 8% 3%
Blue Dart 3,188 3,935 23% 397 311 -22% 240 224 -7% 8% 6%
Arshiya 2,125 2,734 29% 423 702 66% 201 345 71% 26% 13%
Essar Ports 8,192 2,719 -67% 2,988 2,145 -28% 276 450 63% 79% 17%
Gati 2,252 2,361 5% 216 277 29% 32 53 65% 12% 2%
Sical Logistics 1,777 1,802 1% 138 197 43% 24 26 7% 11% 1%
Patel Integrated 1,070 1,111 4% 34 35 3% 6 4 -31% 3% 0%
Aqua Logistics 1,329 868 -35% 129 61 -52% 76 13 -84% 7% 1%
Varun Shipping 2,202 790 -64% 1,007 62 -94% 118 825 598% 8% 104%
Shreyas Shipping 486 771 59% 86 42 -51% 45 3 -94% 5% 0%
Gateway Distri. 520 563 8% 271 321 19% 230 207 -10% 57% 37%
SEAMEC Ltd 247 308 25% (67) (230) - (99) (272) - - -

Results Update – Annual

Company Revenue EBITDA PAT Margins FY’11
FY'10 FY’11 YoY FY'10 FY’11 YoY FY'10 FY’11 YoY EBITDA NPM
CONCOR 37,057 38,266 3% 9,616 10,226 6% 7,867 8,301 6% 27% 22%
Shipping Corp. of Ind. 34,631 35,434 2% 4,690 7,098 51% 3,769 5,674 51% 20% 16%
Allcargo 26,329 28,613 9% 2,790 2,697 -3% 1,706 1,659 -3% 9% 6%
Mercator Lines 18,436 28,069 52% 6,619 6,166 -7% 532 468 -12% 22% 2%
GE Shipping 30,415 25,580 -16% 9,107 10,920 20% 5,128 4,732 -8% 43% 18%
TCI 15,224 18,527 22% 1,146 1,400 22% 413 501 21% 8% 3%
Aegis Logistics 3,057 18,121 493% 726 834 15% 430 471 9% 5% 3%
Blue Dart 9,097 11,507 26% 1,065 1,556 46% 612 947 55% 14% 8%
Varun Shipping 9,026 8,368 -7% 2,834 3,670 30% 126 147 17% 44% 2%
Arshiya 5,259 8,188 56% 891 1,598 79% 594 746 26% 20% 9%
Sical Logistics 7,260 7,711 6% 375 (1) - (357) (80) - - -
Gati 6,303 7,512 19% 615 859 40% (151) 151 - 11% 2%
Essar Ports 10,282 5,170 -50% 3,227 1,384 -57% 900 209 -77% 27% 4%
Patel Integrated 3,467 4,268 23% 117 143 23% 46 35 -24% 3% 1%
Aqua Logistics 3,220 3,810 18% 324 358 10% 205 224 9% 9% 6%
Gateway Distri. 1,670 1,915 15% 882 1,014 15% 772 848 10% 53% 44%
Shreyas Shipping 1,479 1,904 29% (2) 304 - (157) 128 - 16% 7%
SEAMEC Ltd 4,248 1,024 -76% 2,237 (544) - 2,039 (668) - - -

Note: Financial Year for Allcargo and Blue Dart is Jan-Dec and that for Gati is Jul-Jun

Source: Company Websites, Four-S Research

Research Desk


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Four s fortnightly logistics track 14th february - 27th febriary 2012

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Four s fortnightly logistics track 14th february - 27th febriary 2012