Menzies lands in several new airports after takeover deal
Acquisition in line with move to focus on aviation Deal takes firm into locations including Liverpool
Logistics group John Menzies has struck a takeover deal which strengthens its position in the UK aircraft ground handling market and takes it into four new airports.
The Edinburgh-headquartered business has acquired Manchester-based aircraft deicing specialist Airline Services for an undisclosed sum.
The firm, which has an annual turnover of £34.9 million, provides de-icing and other services to more than 60 airlines at 12 UK airports, together with ground handling operations at London Gatwick.
The deal will see Menzies expand into four new locations – Birmingham, Exeter, Liverpool and Newcastle.
In a stock market statement the company said: “By combining with Airline Services, Menzies’ strengthens its existing UK presence and deepens its product portfolio. This will allow the company to continue growing in the UK by expanding its service offering tonewandexistingcustomers at a wider range of locations.”
Forsyth Black, managing director of Menzies Aviation, added: “This is a significant addition to our UK business and is in line with our strategy to offer the deepest portfolio of products to our airline customers. The deal strengthens our market position in the UK, extends our product offering and takes us into new airports where we can now offer the full suite of Menzies services and continue to grow our business.”
Last month, Menzies revealed that the sale process for its distribution arm has started as it looks to become a pure-play aviation business. The group made the announcement as it reported its 2017 results, describing the year as “transformational”. Turnover increased to £2.5 billion from £2.1bn, while pretax profit grew to £26.7m from £19.8m.
Menzies’ aviation business had what the firm described as an “excellent” year on the back of the group’s $202m (£144.5m) purchase of US aviation services group ASIG, which completed in February last year. Underlying operating profit at Menzies’ aviation arm was up 72 per cent to a new high of £58.8m, despite several headwinds such as Air Berlin and Monarch Airlines collapsing.
It also saw net contract wins in the year total 150 and included a “significant” tie-up with British Airways owner International Airlines Group.
Underlying operating profit for the group’s distribution business area was in line with last year at £24.8m despite volume declines in the newspaper and magazine market.
The group said the sale process for Menzies Distribution has been launched, after the group last year dropped plans for a £40m merger between the unit and parcels business DX Group, and in 2016 appointed financial adviser Rothschild & Co to look at splitting its two divisions.
businessdesk@scotsman.com