KKR acquires majority stake in pallet pooling platform LEAP India

KKR, a leading global investment firm, and LEAP India, a leading pallet pooling platform, announced the signing of definitive agreements under which funds managed by KKR will acquire a majority stake in the company.

Founded in 2013 by Sunu Mathew, LEAP is a leading pallet pooling platform in India, providing a wide range of supply chain solutions including equipment pooling, returnable packaging, inventory management and movement, transportation, and repair and maintenance across e-commerce, consumer durables, beverages, fast-moving consumer goods and automotive industries. LEAP operates a network of 21 warehouses and more than 3,500 customer locations, and manages more than six million assets, including pallets and containers, across India for its customers.

"The investment builds on strong macroeconomic tailwinds in India that include a focus on modernising, automating, and optimising efficiencies in supply chains and logistics services. In addition, sustainable logistics is expected to play a critical role in driving India’s rapid economic growth over the next 25 years. As Indian corporations increasingly look to focus on core operations and sustainably streamline logistics arrangements, there is significant opportunity for platforms such as LEAP to provide high-quality and efficient supply chain solutions," says an official release from KKR.

Ami Momaya, Director, Infrastructure, KKR, says: “We are pleased to invest in LEAP, a standout leader in India’s pallet pooling industry that will play an important role in driving the country’s continued modernisation and growth. LEAP is supporting this shift by providing the critical assets needed for the manufacturing, storage, and movement of goods in supply chains and in so doing also helps companies to be better equipped to improve the environmental impact of their operations. The company has grown rapidly since its founding under the leadership of a talented management team, and we look forward to collaborating closely and leveraging our deep infrastructure experience, operational expertise and global networks to help LEAP achieve its next stage of transformation.”

Sunu Mathew, Founder and Managing Director, LEAP India adds: “From Day One, LEAP’s mission has been to provide quality supply chain solutions to support our clients’ needs and contribute to India’s modernization. We are proud of our growth and grateful for the support received from our strategic partners and investors, including our first investor Mayfield, that have helped us to scale to where we are today. Going forward, we look to tap into KKR’s global expertise to accelerate our growth and deliver impactful solutions to our clients.”

KKR is making this investment as part of its Asia infrastructure strategy. "The acquisition of LEAP marks KKR’s latest infrastructure investment in India. Past transactions in the sector by KKR have included Serentica Renewables, a decarbonisation platform that seeks to provide complex clean energy solutions for energy-intensive, hard-to-abate industries, Hero Future Energies, an independent power producer and the renewable energy arm of the Hero Group, Highways Infrastructure Trust, a roads infrastructure investment trust (InvIT), Virescent Infrastructure, a renewable energy platform in India; and IndiGrid, a leading infrastructure InvIT."

The transaction is expected to be completed by Q3 2023, subject to customary pre-closing and closing conditions.

The deal is likely to have been executed at an enterprise value of Rs 3,000 crore ($366 million), Economic Times reported. LEAP India reported a revenue of Rs 211 crore in FY2022 and EBITDA of Rs 113 crore.

LEAP India has raised over $113 million (Rs 927 crore) till now from 12 investors including Schroder Adveq, Morgan Stanley and TVS Capital Funds, according to data from Crunchbase.

Earlier this year, LEAP also acquired Mumbai-based asset-renting firm SKAN Marine.