American investor wraps up takeover of parcel delivery group Hermes
Leeds-based parcel giant Hermes UK has been bought by American investor Advent International.
The deal comes two years after Hermes’ owner Otto Group revealed plans to find a strategic investor in the European parcel group.
Advent and Hermes UK’s management team have taken a 75% stake in the UK business, with Otto holding the remaining 25%. Advent will also take a 25% stake in Hermes Germany. The value of the deal has not been disclosed but Reuters has reported a combined deal value of around 1bn euros (£900m).
Martijn de Lange, chief executive at Hermes UK, said: “This is fantastic news for Hermes UK as we continue our upwards trajectory in the fast-growing and capital-hungry home delivery sector.”
The announcement of the deal comes just after Hermes filed accounts for its UK operations. Revenues jumped 15% to £860m in the year to February, with pre-tax profits rising almost twice as fast, up 28% to £46m.
The latest figures continue a sharp upward trend, with the group increasing revenues by £300m in the last three years. The 2020 financial year finished before lockdown, when delivery companies were unseasonally busy and dealt with volumes usually only seen at Christmas, and there is an expectation that the Covid-19 pandemic has accelerated consumers’ adoption of online shopping.
Last month Hermes revealed plans to invest £100m to expand its capacity so that it can handle double the volume it saw during last year’s Black Friday and Christmas periods.
Hermes UK has already invested £30m this year in sub-depots, vehicles and customer service technology, and the company said Advent’s takeover will facilitate further investment.
The group, which directly employs around 3,500 people, plans to increase its own workforce by 1,500 and create opportunities for a further 9,000 people as self-employed couriers.
de Lange added: “The investment will enable us to remain independent and be agile and responsive to future market requirements.
“It will help to expedite the development of our capacity and technology, supporting the introduction of new innovative products and services that will greatly benefit our retail clients and their customers.”
The management of Hermes UK will continue to lead the business as an independent company, with ‘business as usual’ for employees, suppliers and customers.
Advent’s current investments include InPost, a company which provides secure self-service lockers for the collection, return and delivery of parcels that has seen significant growth since Advent’s involvement.
The transaction with Otto Group is subject to approval by the boards and relevant antitrust authorities.