Aqua Logistics surges on its decision to acquire Hong Kong-based logistics companies
Aqua Logistics, a full-scope 3 PL (third-party logistics) service provider, entered into an agreement on March 26, 2010 at Hong Kong to acquire three Hong Kong-based logistics companies — CIT Logistics (CIT), TAG Logistics (TAG) and AGI Logistics (AGI) — through its wholly-owned subsidiary, Aqua Logistics HK. This acquisition in South East Asia will help Aqua increase its geographical presence, spread its reach in other parts of the world and give external strength to compete with top multinational companies in its business domain.
The scrip is currently trading at Rs 271.90 per share, up 17.35 points or 6.82% on the BSE.
The stock opened at Rs 259.90 compared to its previous close of Rs 254.55. Intraday, the counter has touched a high and a low of Rs 274.75 and Rs 258, respectively.
So far 8,44,000 shares of the company were traded on the BSE. The stock of the face value of Rs 10 touched its 52-week high of Rs 286.40 on March 10, 2010 and a 52-week low of Rs 219.40 on February 23, 2010.
Further, pressure to lower its operational costs due to general business downturn, low margins and high people costs in developed markets will give Aqua an opportunity to move certain processes to India, which has lower operational costs vis-a-vis developed countries.
Initially, Aqua Logistics will acquire majority stake of 60% in CIT, TAG & AGI for a total consideration of $7.09 million. Aqua, through the same agreement, intends to acquire additional 15% equity stake over a five-year period, in tranches, subject to certain terms and conditions and as per business performance targets to be achieved by CIT, TAG & AGI. Payment for the acquisition of CIT, TAG & AGI will be in cash.
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