EUROPEAN ADVENTURE
Imperial acquires Palletways group and all its subsidiaries for £163 million
IMPERIAL Mobility International, a wholly-owned subsidiary of listed Imperial Holdings, has acquired UKbased Palletways Group and its subsidiaries for £162.9 million (R3.7 billion).
On the signature date of the acquisition, Palletways’ annual revenue for the financial year to May was about £135.5m, its net asset value about £23.2m and its earnings before interest tax depreciation and amortisation about £16.4m, of which about 96 percent would be attributable to Imperial.
Founded in the UK in 1994, Palletways provides an express delivery solution for small consignments of palletised freight through more than 400 depots and 14 hubs.
These depots and hubs collect and distribute 38 000 pallets daily, or 8 million pallets, a year across 20 European countries.
The management of Palletways has decided to co-invest alongside Imperial and will own about 4 percent of Palletways. Imperial said that this was evidence of the long-term commitment of Palletways’ management to the company and its strategic objectives.
Palletways was acquired from Phoenix Equity Partners, a leading UK mid-market private equity firm.
Complementary
The acquisition is still subject to the approval of the European competition authorities.
The purchase price will be settled by Imperial from existing unutilised foreign credit facilities and cash.
Imperial chief executive of Mark Lamberti said yesterday that Palletways’ business model and geographic reach would be complementary to Imperial’s existing services and networks in the logistics sector.
“We admire the past achievements… and look forward to working with them to enhance Palletways’ presence and service in the (UK) and Europe,” he said.
Imperial said the acquisition was in line with the company’s stated strategic intent to expand its presence beyond South Africa through the acquisition of asset light logistics businesses that benefited from Imperial’s existing footprint and capabilities.
It said the acquisition complied with all of the group’s acquisition criteria, including that it was strategically coherent, value accretive, growth enhancing, would achieve returns on invested capital above the weighted average cost of capital and was cash generative.
James Wilson, the chief executive at Palletways, said it was delighted to be working with Imperial as it moved to the next stage of Palletways’ development by continuing to expand into new markets while enhancing their member and customer experience.
Wilson said the Palletways management team shared a common vision with Imperial and was fully committed to the business as it pursued its strategy for further growth.
Expanded
“This is an exciting opportunity for Palletways and all its members to build on our success,” he said.
Under Phoenix’s ownership, Palletways has expanded through a series of greenfield investments and international acquisitions, growing from a UK-only operation to an integrated pan-European operator and more than trebling profits over the last three years. Imperial said the acquisition affirmed the success of the management team and the previous owner Phoenix in developing the business’ value and reach through geographical expansion and investment in Palletways’ sector leading services.
Phoenix managing partner Richard Daw said it worked closely with James Wilson and Palletways’ management team to grow a UK business into a European market leader.
“With its greater scale and growth potential, the business has rightly attracted the attention of a strong strategic acquirer in the shape of Imperial,” he said.
Imperial shares gained 1.04 percent yesterday to close at R147.06.
£135.5m Palletways’ annual revenue for the year to May