Itella will acquire National Logistic Company (NLC), the leadingwarehousing service provider in the Russian logistics market, to strengthen its position inNorthern Europe and make it one of the market leaders in the rapidly growing Russian logisticsmarket. The purchase price is estimated at €200 million.
With the takeover, Itella Logistics will provide logistics servicesthroughout Russia via its extensive logistics centre network and transport connections. Thecompletion of the acquisition is subject to the approval of the Russian competitionauthorities.
NLC is one of the few operators with a comprehensive logistics centrenetwork, covering not only Moscow but also six other major cities in Russia including Novosibirsk,Ekaterinburg, Rostov-on-Don, Samara, Lesnoy Gorodok and Khimki.
The company is growing fast with staff of 6,000 expecting €180 millionsales for 2008. By the end of this year, it also plans to increase its warehousing space to 600,000sqm including 230,000 sqm in its own premises. In addition to warehousing, NLC’s services comprisetransport and deliveries in Russia, complemented by Itella Logistics’ comprehensive global land,sea and air freight services.
The service portfolio and customer business lines of Itella Logisticsand NLC are highly similar. NLC’s customer base consists of international manufacturers and retailchains of daily and special goods, pharmaceutical companies and Russian trade firms.
“Russia’s intense economic growth is boosting demand for logisticsservices. For instance, last year demand for warehousing space in Moscow outstripped supply manytimes over. Through NLC, we will gain a strong competitive advantage as a provider of globallogistics solutions. We will also be able to provide the most comprehensive network of logisticscentres and transport services in Russia, for Finnish and international customers,” commented VesaVertanen, Senior Vice President, Itella Corporation.
Nikolai Artemenko, Vice President of NLC, added: “During the last yearsNLC was growing up rapidly almost doubling its operations each year. Our principal objective ofintegration with Itella is to achieve a new superior level when we’re providing clients with evenmore innovative and technologically enhanced solutions, and therefore to reinforce and extend ourleading positions”.
The sellers of NLC are RosEvroGroup and investment funds managed byCitigroup Venture Capital International (CVCI). RosEvroGroup will continue its activities asminority shareholders with a share of 10 % in contact logistics and will keep full control overcustoms clearance and brokerage business.
In 2006, Itella Logistics established its own service operations inRussia. Last year, a 20,000 sqm warehouse was opened in Moscow. This year, Itella expanded its ‘A’warehouse facilities in Moscow with an area of up to 40,000 sqm and plans to open a new warehouse inSt. Petersburg in May.
