German Deutsche Post snaps up Securicor Omega for £167M
Deutsche Post, the German postal group, yesterday stepped up its rivalry with the Royal Mail in the UK’s rapidly deregulating parcels sector by taking control of Securicor Omega in a deal worth pounds 167m.
The German postal service bought the remaining 50% stake it did not own in the post and logistics business from Securicor. Deutsche Post refused to say whether it was also interested in mail assets coming up for sale at Hays.
Deutsche Post plans to roll its British express, freight and other logistics interests inside DHL, the courier and delivery business of which it has also just won complete control.
“It is an important part of our strategy to combine everything inside DHL and we believe its much easier to use synergies when a business is fully owned,” said a spokeswoman at the German headquarters.
She dismissed as “rumours” suggestions that Deutsche Post was casting its eyes over the Hays business while others pointed out the timing of that disposal is far from certain.
Deutsche Post bought its first 50% stake in Securicor Omega four years ago; profits dipped but have started to rise again. Over the last couple of months Securicor Omega has been trying out bulk and consolidated mail deliveries after winning a licence last year to provide private sector competition to Royal Mail.
Securicor plans to return around pounds 75m of the sale proceeds to its shareholders in the form of a special dividend worth 12p per share.
The rest will be used to pay down debt to about pounds 120m and help expand in the three core areas which the group is now committed to: cash management, integrated security and justice services, such as prisoner escorting.
“We have been wanting to sell the stake [in Securicor Omega] for some time but there were capital gains issues that we wanted to avoid,” said its chief executive, Nick Buckles. “They were removed by last summer’s finance bill and we have waited until now to get the right value.”
Securicor has about pounds 100m to invest in acquisitions and has plans to expand in Germany, Canada and China on its cash management side. It also wants to enter new markets such as Holland and Africa.
The group is also keen to increase its electronic monitoring business in places such as Australia.
Justice services, which include a detention centre in Holland and a youth centre in the US, are set to grow more slowly, Mr Buckles said.
The City reacted very positively to the Securicor move, marking up the stock 6.5% at 83.5p. “To get a deal done is good news for anyone in this market and 12p per share is a weighty part of the current share price,” said Paul Jones, analyst with Numis Securities.
Separately, Mr Buckles said the firm was nearing an agreed sale for its information systems unit “in the next month or so”.
