Private equity firm ADV Partners buys Tata DLT

Industry:    May, 2019

Tata International and Sri Lanka-based Dutch Lanka Trailer Manufacturers (DLTM) are about to sell their 50-50 joint venture company Tata International DLT (Tata DLT) to Canyon Point Investment, a wholly-owned subsidiary of private equity firm ADV Partners.

In a parallel transaction, TRF, through its affiliate, has also executed definitive documents to sell its 100% stake in DLTM to Canyon Point.

The total deal value of both the transactions stands at Rs 305 crore, subject to adjustment of actual debt in DLTM, the firm indicated.

Tata DLT’s product portfolio comprises a wide range of trailers, semi-trailers, tippers and vehicle carriers. The firm has manufacturing units in Pune (two plants), Ajmer and Jamshedpur. Established in 2005, Tata DLT started its journey with an aim to provide trailers to Tata Motors.

Following a series of successful years with Tata Motors, the company expanded its journey to the open market.

A person close to the deal told FE that the Tata group had been eyeing to exit this business for some time now. “The Tata group is now focussing on their core strategy. Because of this, some sort of restructuring has been happening. The group had marked this firm for an exit for almost a year now,” the person said.

Tata International is a global trading and distribution company, with a network of offices and subsidiaries in more than 39 countries in Africa, Asia, Europe and the Americas. TRF is a supplier of bulk material-handling equipment, and is listed on the BSE.

Singhi Advisors acted as the sole advisor to Tata International and TRF for these divestments.

DLTM, established in 1992, has been part of Tata Enterprises since 2009, and became a wholly owned subsidiary of TRF in 2011. DLTM commenced trailer production in 1998 from a factory at Kelaniya in Colombo. The firm has a capacity to produce 3,500 trailers per annum, and exports to more than 45 countries. It has 30% market share in port trailers in the Middle East, and 65% market share in road trailers in Sri Lanka and Bangladesh.