SOUTH AFRICA – City Logistics, a logistics service provider, and private equity management group Clearwater Capital have partnered to acquire 100% of franchised courier company, Fastway Couriers South Africa.
Clearwater Capital will hold a 30% minority stake in the new structure.
The Fastway acquisition will also allow City Logistics to provide its existing and future customers with a small parcel solution.
The two companies share Mr Price group, Home Choice and The Foschini Group as customers.
According to City Logistics CEO Ryan Gaines, the acquisition creates one of the largest turnkey logistics providers to the fashion, retail and e-commerce sectors.
In addition to this, the combined businesses will offer one of the most affordable delivery options in South Africa for small and medium-sized enterprises, as well as corporates, he adds.
“This is a strategic investment, giving us the opportunity to increase the services offered to our existing clients, to serve a new customer base and to provide solutions for a market that requires options to reach their end-customers,” notes Gaines.
“With the anticipated growth of e-commerce, it is a critical part of our growth strategy.”
South Africa is reported to be the forty-first largest market for e-commerce with a revenue of $5-billion in 2021.
Global e-commerce sales are expected to increase over the next few years, with South Africa’s yearly growth rate of 8% (between 2021 and 2025) anticipated to outperform the global average of 6%.
“This transaction will further assist the growth opportunity that lies with global e-commerce retailers like Alibaba and Shein, where imports are brought to one central place for final distribution to end-customers,” said Gaines.
“This is a service that Fastway is likely to develop further in the future.”
Clearwater Capital’s investment is underpinned by a desire to provide entrepreneurship support.
“Fastway’s unique regional franchise model provides an opportunity for micro-entrepreneurs to benefit from the growth opportunity in the e-commerce sector,” said Clearwater Capital executive director Keval Mehta.
“Logistics companies are increasing their workforces and technology to keep up with increasing e-commerce demand and, in doing so, are contributing much-needed jobs.”
The Fastway transaction, which includes Fastway Couriers’ National Master (Fastway South Africa), as well as Fastway Johannesburg and Fastpost, follows on City Logistics’ acquisition of Fastway Cape Town and Fastway Durban last year.
Fastway will continue to operate as normal, servicing its existing routes and using existing suppliers.
City Logistics has 14 depots supporting a fleet of more than 1 000 vehicles.
Established in 1983 in Napier, New Zealand, Fastway Couriers is now a globally franchised courier company, and has a presence in New Zealand, Australia, Ireland and South Africa.
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