3i cashes in its 2002 Palletways investment

Venture capital company 3i has sold off its stake in West Midlands firm Palletways, one of the country’s leading specialist freight services companies.

Palletways, based in Lichfield, has been acquired by Phoenix Equity Partners, which has backed James Wilson – the former European senior-vVice president of TNT Express Worldwide – as the new chief executive.

3i invested some 8.3 million euros (pounds 5.53 million) in Palletways in May 2002 to fund a management buyout. Since then the company has extended its network across Europe and performed consistently well over the last two years, more than doubling its turnover.

The company operates a national hub and spoke network that allows regional hauliers to deliver small consignments nationwide at low cost.

Palletways, which was originally set up in 1994, now has more than 30 per cent of the UK market in the overnight distribution of small consignments of palletised freight. The firm operates through a network of member firms from its central 350,000 sq ft hub in Lichfield, where it is able to handle up 28,000 pallets per day.

It has the leading bespoke IT system in the sector offering full ‘track and trace’ visibility of pallets to its network of customers and members. As a result its system can deliver small consignments more securely, quickly and cost effectively than conventional logistics businesses.

Richard Bishop, 3i director, said yesterday: ‘3i invests in talented, ambitious management and works in partnership with them to build value. Palletways is a great example of this. We backed Julian Maturi in 2001 and have seen a period of rapid growth, during which we also have helped them develop their European business.

‘Palletways is now a national success story and an extremely profitable investment for 3i.’

3i added that its exit from Palletways had delivered a 72 per cent return.

Julian Maturi, managing director of Palletways, added: ‘3i have been a valued partner over the last two years, who have given us strong support to develop the business. We’re pleased to have delivered an excellent result for them’ Palletways recently launched a new regional hub in London – the first development of its kind in the sector – to provide a high quality and competitive distribution service in the capital and South-east region.

The London facility is the fourth UK hub operation, adding to those in Lichfield, Edinburgh and Portadown. Palletways also has a hub in Roscrea, which serves Southern Ireland.