UK ANC plans to deliver on back of GBP37m deal
Directors of one of the UK’s largest parcel carriers have increased their stake in the firm after completing a £37.3 million funding deal.
ANC Group chief executive Mark Gittins and his management team now hold a 73 per cent stake in the Newcastle company after successfully agreeing to buy 50 per cent from institutional investors.
Following the deal, the management team plans to increase investment in its vehicle fleet and is targeting further strong growth over the next three years.
The team took over in 2001 and has since invested £10 million in growing the business, which employs 1,700.
Mr Gittins said the deal would allow the company to gain an advantage amid consolidation in a market worth £2.5 billion a year.
He said: “The express parcels sector is very competitive and ANC Group has not only held its unit cost base, but investment has given us the capacity to handle a further 35 million parcels a year.
“We are seeing significant sector consolidation as businesses look to capture the benefits of integration and develop international revenue streams in and out of the UK.”
The ANC Group, which was formed in 1982, handles up to 200,000 parcels a day using a fleet of 2,200 vehicles spread across 81 depots in the UK.
The group comprises its ANC Express economy and premium courier service; its logistics arm, which provides night distribution services; and foreign services through its international division.
ANC, which now has a group retail turnover of £200 million, also operates its own employment agency.
Investment in recent years allowed the group to win more than an 11 per cent share of the UK internal domestic express parcels market and more than seven per cent of the combined domestic and international UK parcels market. News of the financing comes against a rise in consolidation in the sector.
Last year Nuneaton-based Lynx Express was acquired by American giant UPS, while Amtrak Express Parcels recently bought Nightspeed Services. Parcels firm Tuffnells also has new funding and Night Freight was acquired 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.
Mr Gittins said: “Our record in recent years of winning market share will continue as we exert leverage over our additional capacity and build on our reputation for excellent service. Our commitment to continuing investment will ensure our diverse and loyal customer base receives the best service available in the market.”
Carl Wormald, investment director at venture capitalists Lloyds Development Capital, said the group had successfully adapted despite rising fuel costs and increased pricing pressure.
He said: “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.”
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