DX Group expecting to raise £200m in IPO tomorrow
Mail, parcels and logistics firm DX Group is expecting to raise just over £200m as it floats on the London Stock Exchange’s Alternative Investment Market tomorrow. The company is pricing each of the 200.5m ordinary shares available at its IPO at 100p, and ahead of the start of trading tomorrow, said it has attracted a “strong level of support” from institutional investors.
DX Group, which provides next-day and secure delivery services for mail and parcels in the UK and Ireland, as well as two-man deliveries for large items, delivered about 170m items in 2013. The firm was founded in 1975 and generated £305.7m revenue in 2013, with a net cash flow of £22.9m.
It is planning to use the funds raised in tomorrow’s listing to repay existing debt and shareholder loans, but also to invest in service development.
The company said investment would enhance its reputation and “add further credibility” to its service offering.
Hopes are that the AIM listing will also help raise the company’s profile.
Trading officially begins tomorrow at 8am local time, with ordinary shares traded under the symbol “DX”. Zeus Capital Limited is acting as nominated adviser and sole broker.
DX management is expected to hold a 3.64% stake in the company, with those including David Hoare, CEO Petar Cvetkovic and CFO Ian Pain trading their current equity interests in for shares.
“New era”
Ahead of the IPO, DX chief executive Cvetkovic said the business had transformed “significantly” in recent years, generating an “attractive and scalable” customer-focused business underpinned by the fast-growing parcel and freight markets.
He said the IPO was a “new era” for the company’s development.
Cvetkovic said: “We are very pleased with the strong level of support from institutional investors which is testament to the strength of our business and the future prospects ahead of us. The Placing and subsequent admission to AIM will support our business as we seek to continue to deliver great customer service and grow our brand.
DX Group is currently in the process of rolling out its rebranded livery for its fleet of 1,500 vehicles, with the tagline “Delivered Exactly”.
The firm is in the process of co-locating its DX operations with DX Freight operations, DX Freight being the rebranded identity of Nightfreight, the delivery firm acquired in March 2012, which accounted for £134.7m of turnover in 2013.
Operationally the company is expected to benefit from the continuing strong growth in the UK e-commerce sector, but is also looking at developing new secure electronic mail services to compensate for the threat to the physical mail business from e-substitution.
