DHL owner seeks big stake in Williams Lea

Germany_Deutsche Post AG, Europe's biggest postal company and owner of shipper DHL, said Monday it will pay about $443 million for a 75 percent stake in Britain's Williams Lea Group Ltd. with an eye toward acquiring it completely.

The Bonn-based company said Williams Lea should bolster its own document management and logistics business.

Under the terms of the deal, which is subject to regulatory approval, Williams Lea will operate independently of Deutsche Post, which does business as Deutsche Post World Net, and keep its board of directors.

"We have been very impressed with Williams Lea and its management team. They have demonstrated an impeccable track record for delivering growth, integrating acquisitions and delivering a best-in-class service to clients," said Hans-Dieter Petram, a member of Deutsche Post's board.

He added that that the company would help augment its DHL Global Mail.

"We see considerable potential to leverage our world class mail and logistics capability in adding more value to Williams Leas customer proposition," Petram said.

Currently, 38 percent of Williams Lea is owned by the venture capital firm 3i Group.

Founded in 1820, London-based Williams Lea offers corporate information management as well as document, print and logistics management. Its clients include financial services, pharmaceutical and retail companies. It employs 6,500 workers.

In 2004, it bought Bowne Business Solutions from Bowne & Co. for $180 million.

"We are delighted with the outcome of our recent negotiations and Deutsche Post World Net's decision to become our principal investor. Their business is wholly complementary to ours and we are eager to draw on their extensive business experience as a major global organization in international mail logistics," Williams Lea CEO Tim Griffiths said.

Shares of Deutsche Post rose less than half a percent to 23.22 euros ($27.79) in Frankfurt trading.

Deutsche Post puts its stamp on U.K. peer 02-14-2006
By by Andrew Bulkeley in Berlin

German delivery group Deutsche Post AG agreed Monday, Feb. 13, to take a 75% stake in British peer Williams Lea plc, helping the former state postal service to prepare for an end to its monopoly on domestic letter delivery and providing a tidy exit for London private equity shop 3i Group plc.

Bonn-based Deutsche Post said it would pay about €370 million ($440.5 million) for the majority stake from a consortium of investors including the London investor. The German group, which is now 42% owned by the German government, said it also has an option to buy the remaining minority holding.

The purchase of Williams Lea by the German delivery giant will provide a tidy exit for London PE shop 3i Group.

"Williams Lea creates a superb platform for taking advantage of the ever-increasing liberalization of international mail markets," said management board member Hans-Dieter Petram in a release.

European countries are working to end letter-carrying monopolies, opening up markets to outsiders and sparking a consolidation in the delivery industry. Deutsche Post, which will lose its monopoly next year, began preparing for the deregulation at the start of this century by acquiring international delivery group DHL International GmbH and, earlier this year, completed the €5.5 billion buy of U.K. corporate logistics group Exel plc.

Deutsche Post spokesman Uwe Bensien couldn't be reached to comment, and Williams Lea didn't return a call seeking comment.

3i said it had a return on equity of 3.4 times in the two-year-old investment in Williams Lea by selling a 38% stake for £110 million ($192 million) to the German delivery giant. The investor put a total of £34 million in Williams Lea to help the delivery group bulk up. It added it advised the company on two key investments.

The other members of 3i's investor group were heirs of the Williams family, the company's pension scheme and board members, according to William Lea's annual report.

Just six months after 3i came on board, Williams Lea bought out its partner in its Bowne Business Solutions U.S. venture for $180 million, and last year, the company picked up another U.S. rival, Uniscribe Professional Services Inc. It also added an Australian group, Creatis, to expand in the Asia-Pacific.

London-based Williams Lea is nearly 200 years old and had revenue of $766 million in the year through Sept. 30, 2005. The group employs 6,500 and specializes in letter delivery as well as managing corporate information and internal communications.

The acquisition is expected to close in March.

Consolidation in the delivery sector appears to be continuing apace after a robust 2005. Denmark's DSV A/S last month agreed to buy Dutch rival Koninklijke Frans Maas Groep NV for €433 million in a tender offer that will begin in March. Last year, Deutsche Post announced the Exel deal while Deutsche Bahn AG, Germany's state-run railway, sealed a deal to buy U.S. supply-chain management specialist BAX Global for $1.1 billion.

Currently on the block is the logistics arm of Dutch transportation giant TNT NV.

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