ANC bosses in pounds 37.3m buyout
Parcel group ANC has delivered a pounds 37.3 million buyout of the company.
The management team has bought a 50 per cent stake previously held by institutional shareholders.
The deal, backed by private equity firm Lloyds TSB Development Capital, sees the management’s equity increase to 73.75 per cent with LDC taking 26.25 per cent.
Led by chief executive Mark Gittins, the six-strong team took over in 2001 and have overseen significant growth in both revenue and profits.
Formed in 1982, ANC Group employs 58 people at its Birmingham depot and 5,000 in total.
The business operates a fleet of 2,200 vehicles from 81 depots across the UK, including two national hubs in Newcastle-under-Lyme and Marston Gate near Milton Keynes.
The business has invested pounds 10 million during the last three years in order to create the infrastructure and capacity required to support its growth.
ANC Group claims an 11 per cent share of the UK internal domestic express parcels business and over seven per cent of the combined domestic and international UK parcels market. Turnover has risen from pounds 123 million in 2004/2005 to pounds 133 million in 2005/2006.
Retail turnover, which includes franchises, is reaching pounds 200 million. There are 15,000 customers.
Following the deal, it is set to increase investment in its vehicle fleet. In the past few years the express parcels sector has seen a significant rise in merger and acquisition activity.
In 2005 Nuneaton-based Lynx Express was acquired by American giant UPS whilst Amtrak Express Parcels recently bought Night speed Services to increase its network. Parcels firm Tuffnells obtained new funding and Night Freight was bought last year by RBS. These follow the recent major acquisition of Exel by DHL.
Further consolidation is widely anticipated as sector players look to capture economies of scale and spread support costs.
Mr Gittins said: “This deal confirms ANC Group’s position as the fastest-growing independent player in the UK.
“The express parcel sector is very competitive and ANC Group have not only held their unit cost base, but new investment has given us the capacity to handle a further 35 million parcels a year with our existing infrastructure.
“Our record in recent years of winning market share will continue.”
Carl Wormald, investment director at LDC, who led the deal, said: “Despite rising fuel costs and increased pricing pressure ANC has been successful in adapting and growing the business. The UK market for express parcels is worth around pounds 2.5 billion per annum.
“The rising popularity of home shopping is likely to benefit the sector even further and the ANC business together with its already strong position in the UK business-to-business sector is well placed to take advantage of this trend with a quarter of its existing volumes already going to home addresses.”
Dow Schofield Watts, Eversheds and Halliwells advised on the deal. Senior debt was provided by HSBC.
