UK Business Post lines up major takeover
Birmingham-based Business Post is in the final stages of acquiring a Midlands-based logistics company.
Chief executive Paul Carvell, speaking as the company reported bumper annual profits, would not be drawn on the name of his target.
But he confirmed the deal would be a large one for Business Post, require the ungeared company to take on debt and involve a Midlands-based company with a national coverage of ‘complementary’ services to the business parcel, courier and fledgling mail services offered by his company. While Business Post ran an eye over mail operations of Hays Group, which has its largest distribution centre in Nuneaton, it is not considering a bid, leaving the way open for Deutsche Post.
Other candidates may include Willenhall-based Nightfreight, the heavy goods delivery company that was taken private at the start of 2001 after aborted merger talks with United Carriers, now owned by French group Geodis.
Alternatively, Midlands-based Lynx, which was acquired by private equity firm Bridgepoint in 1997, is known to be on the market.
Any deal would be Business Post’s second of the year, following its takeover of New Aston-based specialist contract courier BXT in February for pounds 1.9 million.
Mr Carvell said yesterday that BXT was settling in well and would leverage off Business Post’s broader customer base to win new contracts.
The rest of the Slough-based group saw a strong year in the 12 months to the end of March with overall turnover up 19 per cent at pounds 156.3 million and pre-tax profits ahead seven per cent at pounds 16.1 million.
The growth was driven by a strong performance from its core next-day delivery business Express which boosted its turnover by 14 per cent thanks to a gradual improvement in levels of customer demand across the period.
Its smaller international business saw turnover rise from pounds 12.1 million to pounds 18.2 million, largely as a result of business from delivery giant FedEx.
Under the arrangement Business Post collects and delivers parcels for FedEx customers in parts of the UK not directly served by the company.
The group employs 1,500 people across the UK and also uses 2,000 ‘associates’, such as selfemployed van drivers and employees of other firms which hold franchises with Business Post.
Mr Carvel said progress in setting up its rival to the Royal Mail was ‘frustratingly slow’ having already been licensed by postal regulator Postcomm to handle business mail but failing to reach agreement with the Royal Mail on how much it was to be paid for its part of the service.
Postcomm announced on Monday a set of proposed tariffs which would see the Royal Mail paid just over 11p to deliver items weighing less than 60 grams for rivals. Hays announced in March that it intended to sell off three off its four divisions to concentrate on its successful recruitment business and has had investment bankers in a frenzy ever since.
Business Post’s full year dividend is raised by 5.6 per cent to 16.9p, and on yesterday’s close of 415p, down two per cent, the shares yield four per cent.
Copyright: MGN Ltd
