P

ublicly listed investment company PT Saratoga Investama Sedaya is in the process of acquiring a controlling stake in taxi operator Express Group from diversified conglomerate PT Rajawali Corpora, strengthening its investment portfolio.

Saratoga portfolio director Andi Esfandiari said in a statement on Friday that his firm had signed an agreement to acquire 1.094 billion shares in PT Express Transindo Utama (known as Express Group) from conglomerate Rajawali Corpora.

'€œThe acquisition conducted by Saratoga is a direct acquisition by the company from Rajawali Corpora, which currently controls 51 percent of Express,'€ he said.

Neither company, however, had disclosed the acquisition value as of the time of going to print.

Express finance director David Santoso said in a statement that detailed terms and conditions of the acquisition, including purchase price, were still being negotiated by the two companies.

Saratoga, whose investment portfolio is mostly in infrastructure and natural resources businesses, aims to expand its portfolio in the consumer sector, which is among the fastest growing in the country.

An estimated 90 million Indonesians are forecast to join the consumer class by 2030, giving the country 135 million middle-class consumers and creating a potential business value of US$1.8 trillion, according to a report by consulting firm McKinsey & Company.

Saratoga president director Sandiaga Uno said previously that the company would set aside between $100 million and $150 million of its internal funds for investment purposes this year, eyeing more investment in the consumer sector.

At present, Saratoga'€™s investment portfolio varies from telecommunications infrastructure to mining.

Once the acquisition agreement with Rajawali Corpora is finalized, Express will strengthen Saratoga'€™s consumer portfolio, which currently consists of motorcycle distributor PT Mitra Pinasthika Mustika and local lifestyle retailer PT Gilang Agung Persada.

Express currently operates about 11,000 regular taxis in Jakarta, Depok, Tangerang, Bekasi, Surabaya, Semarang, Medan and Padang.

The taxi operator previously stated that it aimed to be the top taxi operator in Greater Jakarta within the next two to three years by having at least a 30 percent market share in the area.

The top taxi operator in the country is currently publicly listed Blue Bird Group, which operates about 23,900 regular taxis in 17 cities across the country.

After Saratoga and Express announced the acquisition plan, shares of Express, which are traded on the bourse under the code TAXI, rose 8.45 percent to Rp 1,155 per piece by Friday'€™s close from
Rp 1,065 (8.9 US cents) apiece at the previous close.

Express reported that its net profit dropped by 10.9 percent to Rp 118.09 billion last year from Rp 132.6 billion in 2013, mainly due to ballooning expenses.