Mahindra Logistics (ML) has announced acquiring Rivigo’s B2B express business, as a going concern, on slump sale basis, for a lump sum consideration of Rs. 225 crores.
- Rivigo, founded in 2014, operates in two key business segments: Full Truck Load (FTL) and B2B express business. It’s main focus and USP is the relay trucking model with a strong tech interface. Post divestment of B2B business, Rivigo will continue to own it’s truck fleet and the right to the FTL business.
- In the B2B express business, Rivigo operates an asset light model. It has a Pan India network covering over 19,000 pin-codes and operates through 250+ processing centres and branches.
- ML’s acquisition in B2B business includes:
- Customers
- Team
- Assets
- Technology platform
- Rivigo brand
- Rivigo’s B2B express business turnover track record
- FY 20: Rs 528.5 crore
- FY 21: Rs 295 crore
- FY 22: Rs 371.3 crore
To me, the subject acquisition is attractive and makes sense for ML.
- It’s done at less than 1 times of sales.
- ML will get access to Rivigo’s customer base, technology and processes. We can question financial prospects of loss making start-ups – however not their tech prowess. Hopefully, ML can combine that with it’s prudence and existing scale to make the operations financially viable too.