John Menzies to acquire UK based portfolio of businesses
Distribution firm John Menzies has reached agreement for Menzies Distribution, its newspaper and magazine wholesaling subsidiary, to acquire the entire issued share capital of Orbital Marketing Services Group, a portfolio of UK based logistics and marketing services businesses.
Distribution firm John Menzies has reached agreement for Menzies Distribution, its newspaper and magazine wholesaling subsidiary, to acquire the entire issued share capital of Orbital Marketing Services Group, a portfolio of UK based logistics and marketing services businesses.
The total cash consideration, which will be funded from existing banking facilities, amounts to £13.6m, with £7.7m payable now and a further £5.9m payable on December 31st 2014. A further consideration of up to £6.3m will be paid only if exceptionally high levels of profit performance were to be achieved by December 2014.
The move will take the company into new business sectors and adds further services to its existing logistics and marketing services capabilities.
Iain Napier, Chairman of John Menzies, said: "I am delighted that Menzies Distribution has acquired Orbital. This acquisition allows us to expand our printed media distribution footprint whilst also taking a large stride into adjacent growth areas. The team are now focussed on integrating these new businesses and driving through the significant synergies that have been identified.
"Orbital opens up new opportunities for us. The combined network will bring new reach to our logistical capabilities and allow us to expand some of Orbital's services into new areas.
"It has been our strategy to invest within both operating divisions where sustainable earnings can be created. While the majority of the group's expansion will continue to come from our industry leading Aviation services business, this acquisition allows Menzies Distribution to grow by enlarging its printed media distribution capabilities and opening up new markets with strong growth opportunities."
In the year to March 2012, Orbital posted an operating profit of £2.2m and had gross assets of £13.5m. The acquisition will be earnings enhancing in the year to December 31st 2013.
The portfolio is 51% owned by BP Direct Mail Company and the remainder by Rydlings, the shareholders of which form the existing management team who will remain with the business.
The company was established in 1972 and it employs more than 550 staff at nine locations across the UK.
NR