The sale, if it goes through, is expected to happen for about Rs 50 crore in an all-cash deal.

Kishore Biyanis Future Group in talks to buy Snapdeals logistics arm
Atom M&A Wednesday, January 03, 2018 - 11:42

After AllCargo, Gati and TVS Logistics, Snapdeal’s Vulcan Express has a new prospective buyer. India’s largest retailer Future Group is reportedly in talks to buy the beleaguered ecommerce player’s logistics arm, reports Economic Times.

The sale, if it goes through, is expected to happen for about Rs 50 crore in an all-cash deal.

Snapdeal started its in-house logistics arm Vulcan Express three years ago, which replaced its then primary logistics partner Gojavas.

This deal could help Kishore Biyani-led Future Group leverage Vulcan’s presence in over 100 cities in its larger plan of integrating its digital and physical retail businesses as part of its Retail 3.0 strategy, reports ET.

This interestingly comes less than a month after Future Group’s Future Supply Chain was listed on the stock exchange, having raised Rs 650 crore through the IPO. It has 44 distribution centres covering 4 million square feet and services 11,228 pincodes in the country.

Vulcan, on the other hand, provides logistics services, including warehousing, transportation, last-mile distribution and reverse logistics as well as quality control and refurbishment of goods, for Snapdeal, smaller retailers and high-value product sellers such as cosmetics firms.

“It will be a distress sale and the final valuation could be less than Rs 50 crore. The contours of the deal, including the size and through which company it will be done, are still being worked out,” ET quotes a source as saying.

Future Group is currently piloting its Retail 3.0 strategy where it is making its Easyday stores a marketplace, giving consumers access to the company’s entire inventory through the digital medium.

After Snapdeal’s sale to Flipkart did not go through, the ecommerce player decided to continue independently and launched Snapdeal 2.0 with a new direction. It also started making itself lighter by selling off its non-core assets. It also sold its digital wallet arm Freecharge to Axis Bank for Rs 385.

Future Group too, has been on an acquisition spree to expand its retail presence. Most recently, it bought Shoppers Stop’s HyperCity for Rs 655 crore, making it the company’s fifth such large acquisition.

Become a TNM Member for just Rs 999!
You can also support us with a one-time payment.