Advent International buys stake in Hermes Germany and Hermes UK
Private equity investor Advent International has reached an agreement with the Otto Group to take a 25% shareholding in Hermes Germany and 75% in Hermes UK.
In a statement posted on its website yesterday (10 August), the Otto Group said that the move will open up new opportunities for the parcel logistics companies to expand their current position in ‘the two most important delivery markets in Europe’.
The Otto Group announced its intention to enter into a partnership in the parcel delivery sector at its annual press conference on 27 May.
The transaction is subject to approval by the boards and relevant antitrust authorities.
In both the UK and Germany, Hermes has continuously strengthened its market position in recent years – in the 2019/20 financial year, the companies transported more than 760 million parcels. In the current financial year, both businesses are recording high volume growth against the COVID-19 pandemic backdrop. In response to this and in expectation of continued growth in the parcel delivery sector, Hermes is further expanding its staff capacity.
Commenting on the agreement, Kay Schiebur, Member of the Executive Board, Services, Otto Group, said: “The enormous interest shown by potential market partners in an investment reflects the attractiveness of the market segment and Hermes’ excellent market position in the two most important delivery markets in Europe. The partnership with Advent gives both companies further scope for essential investments and thus creates optimal conditions for further growth.
“Advent’s logistics expertise in areas such as locker delivery will also help us to further develop our business model”.
Ranjan Sen, Managing Partner and Head of the German Office at Advent International, added: “Advent has significant experience in working successfully with family-owned companies and has previously enjoyed collaborating with the Otto Group with the takeover of the payment service provider Ratepay in 2017. We look forward to deepening this relationship and using our sector expertise to further grow Hermes’ potential in this highly competitive and rapidly growing business segment.”
Following this transaction, the Otto Group retains the majority of shares in Hermes Germany, and its core German market. In the UK, the Otto Group is relinquishing its majority shareholding in Hermes UK, while retaining representation in major strategic decisions. The operational management of both companies will continue with their respective management teams. Cooperation with Hermes’ business partners and clients will also remain unaffected.
“Thanks not least to massive investments in a powerful and flexible network, Hermes has shown in recent months that retailers and end customers can rely on unrestricted high quality delivery, even in an unprecedented environment such as the COVID-19 pandemic,” said Schiebur. “At the same time, the parcel service once again shows how fundamental it is to have functioning competition in the market and the resulting choice for customers. We are pleased that we are now investing in even better delivery quality and additional services in partnership with Advent l and can thus continue on our successful path”.
Advent’s stake in Hermes Germany also includes the other Hermes Germany Group companies, including BorderGuru, Liefery and Hermes Germany’s share in the ParcelLock joint venture. The partnership will not affect Hermes’ activities in Russia, France and Austria, the holding company Hermes Europe or the companies not involved in parcel delivery, namely Hermes Fulfilment, Hermes Einrichtungs Service, Girard Agediss, Hansecontrol and Otto International.