Palletways in management buy-out with support of 3i

Palletways, the UK’s market leader in the express distribution of small consignments of palletised freight, has achieved a management buy-out with the support of a £6 million investment from 3i, Europe’s leading venture capital company.
Palletways, which was founded in 1994, has established itself at the forefront of the express palletised freight marketplace, arguably the fastest growing sectors in the distribution industry. It has seen business increase month-on-month, resulting in a 40% improvement on last year and current turnover is in excess of £40m to year end May 2002. The company will also be expanding its national hub in May, which will double capacity.
The management buy-out has been led by Managing Director, Julian Maturi, and IT Director, Paul Heaney. Peter Ashton will take on the role of Non-executive Chairman. He was previously involved with 3i in the buy-out of EPS, a specialist logistics provider to the telecoms industry, which was sold to Hays for £55m in 2000.
A number of palletised networks have been formed in the UK to meet a need to provide an efficient and responsive supply chain for the express collection and delivery of small pallet consignments, which traditionally have been a headache for both hauliers and their customers.
Palletways has 80 plus strategically placed regional transport operators, known as members, in its national network who carry out a range of services including next day, Economy 2/3 day or timed delivery options.
As part of its palletised freight services, Palletways has recently launched Stargate Logistics, a 120,000 sq ft stockholding facility, which is based alongside the central hub in Lichfield, Staffordshire and dovetails with the company’s national network operation. Stargate Logistics offers both manufacturers and retailers a cost-effective just-in-time replenishment service and in-bound logistics solution. Says Palletways Managing Director Julian Maturi: “This is a significant development for two reasons. Firstly the investment by such a high profile company as 3i, with an unrivalled record in financing companies including businesses in the logistics industry, is testimony to the strength of the Palletways brand and the management team we have in place, as well as the growing stature and potential of the express palletised freight sector.
“Secondly, it represents a new chapter for Palletways as it will enable the company to continue to go forward and grow its market share in the UK as well as realise its expansion plans. We have budgeted for significant investment in our network and services and this will be augmented by funding from 3i, as part of their investment into the company, if this required.
“As the present management will remain it will mean a seamless change and business as usual.”
He added: “These are exciting times for Palletways and our national network of members. We have recently recorded our record night in terms of pallet volume through the system, month-on-month growth continues unabated, and we have just launched a third hub which will enable us to double capacity.”
Director of 3i Midlands, Richard Bishop said: “Palletways represents an opportunity to back a young and ambitious business. Julian Maturi has already demonstrated the ability to deliver strong growth and we share his vision for the future potential of the business. This buy-out reflects our commitment to the £5-50million buy-out market.”
Advising Palletways on the management buy-out was Tenon Livingstone Guarantee, the UK’s largest independent corporate finance house. John Clifford, a Director in the London office of Tenon Livingstone Guarantee, said: “Palletways is the undoubted market leader in a very fast growing sector. With the skills of the management team, and the potential to double capacity at the main site, I am sure Palletways will continue to go from strength to strength.”
The corporate banking division of Bank of Scotland supplied a finance package to support the deal.

from Motor Transport 2.5.02
Palletways founders Andy Hibbert and Steve Aston have made £12m by selling their business to 3i, the venture capital company. The duo set up Palletways in 1994 with a £14,000 loan and did everything themselves from driving forklifts to moving freight. The company now has a turnover of £30m, according to The Sunday Times.
The company‘s new owners are backing the existing management team, led by Julian Maturi, who is taking over the running of the Birmingham-based business.

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From IFW
Palletways has completed a management buy-out led by MD Julian Maturi and IT director Paul Heaney, with the help of £6m (€9.7m) from venture capital company 3i.
The company, which runs an express network for palletised freight, was originally set up in 1994 and boasts current turnover of more than £40m (€65m).

Maturi said the move would allow Palletways to continue to grow its market share in the UK. "We have budgeted for significant

Posted: 06/05/2002