Gurugram, India-based logistics and supply chain company Delhivery is acquiring its biggest rival, Ecom Express, in an all-cash deal, the company mentioned in a stock filing on Saturday. This transaction comes at a time when Ecom Express is struggling to stay in business. Moreover, Ecom Express also stalled its public listing plans and laid off several employees earlier this year.
According to the fine details of the deal, Delhivery will acquire shares that are equivalent to almost 99.4% of the issued and paid-up shares. According to various experts in the market, this deal is a way out for Ecom Express from all its debt and liabilities. Delhivery is willing to pay ₹1,407 crores for the acquisition, which is around $163.8 million. This amount is substantially less than what Ecom Express was valued at around a year ago, i.e, $800 million.
Delhivery thinks that this deal will help the company scale their projects, strengthening its value proposition to its clients and stakeholders. The firm said in an official statement, “Logistics is a scale-driven business where economies of scale lead to higher efficiencies, enabling players to provide higher quality services at more competitive prices.”
It is expected that the acquisition will be over in the next 6 months, and most of the current investors at Ecom Express will exit the firm. According to the Economic Times, Warburg Pincus, British International Investment, and Partner Groups collectively hold around 80% of the shares in the company, which filed for a ₹2600 Crore IPO in August 2024, at the evaluation of $878 million.
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In a statement, Sahil Barua, MD and CEO of Delhivery, said, “The Indian economy requires continuous improvements in cost efficiency, speed, and reach of logistics. We believe this acquisition will enable us to service customers of both companies better through continued bold investments in infrastructure, technology, network, and people.”
