Stellar buys surface transport arm of Patel Int for Rs 38.5 cr

Stellar Value Chain Thursday bought the surface transport arm of the listed firm Patel Integrated Logistics for Rs 38.5 crore. The all-cash deal will help Stellar to double its revenues from its contract logistics business to over Rs 350 crore, its chairman and managing director Anshuman Singh told PTI.

It also gives it the capability by adding the 'less than truck load' contracting abilities, he said. The selling company's vice chairman Arif Patel said this is a "slump sale" where the entire operations, including contracts, workers and the assets, have been transfered.

Patel wants to concentrate on the warehousing, air cargo and express delivery arms, he said, explaining that this sell-out will help clear Rs 60 crore working capital debt it has right now. When asked for the reasons for the decisions to sell out a business of over 60 years, Patel hinted a lot of the legacy staff had become into a problem which the new owners can help resolve.

Singh affirmed that there are no plans to layoff any of the 725 workers, adding that 'people' are the biggest strength of a business like this. He said the acquisition is very synergistic and the one of the smoothest among four such deals cut by his three-year venture.

While Stellar was focused on the eastern markets, Patel's presence in the north and west will help take the combined entity serve 15,000 pincodes in the country through 350 branches. Singh said Stellar is now targeting to increase its revenues from the contract logistics space to Rs 1,000 crore in two years from the Rs 350 crore.

The Patel scrip gained 10.92 percent to close at Rs 56.90 a piece on the BSE, as against a 0.34 percent correction in the benchmark..