Tuffnells set to be acquired in multi-million pound deal
TUFFNELLS Parcel Express is to be snapped up by listed company, the Connect Group, in a deal worth more than £113m.
Swindon-based Connect, formerly known as WHSmith News, is a specialist distributor operating in three divisions; news and media, books and education. This morning, it has announced the proposed acquisition of The Big Green Parcel Machine Holding Company, whose principal subsidiary trades as Tuffnells Parcels Express.
Sheffield-headquartered Tuffnells, which was established 100 years ago, is a provider of next-day B2B delivery, including parcels, bulky furnishings, building materials and automotive parts.
The business operates from 34 depots utilising a fleet of more than 930 vehicles and 800 trailers and containers serving over 4,200 customers across a range of industry sectors.
Tuffnells reported revenues to the end of August 2014 of £138.5m and adjusted EBITDA of £16m.
Connect Group’s directors estimate Tuffnells core addressable market to be worth £740m, and believe that this market is expected to grow at 3-4% per annum.
Following Completion, Tuffnells will operate within the enlarged group as a separate division,
The Tuffnells senior management team includes Lloyd Dunn, managing director, Ian Brewer, finance director, Robin Batchford, systems director, Graham Hollingdrake, operations director and Chris Tresadern, sales and commercial director. The majority of the Tuffnells senior management team have agreed to remain with the Tuffnells business following completion. As part of the enlarged group’s succession planning, Dunn will assist with the recruitment of his successor. It is expected that once appointed, Dunn will become executive chairman of Tuffnells before retiring from the group in 2016.
Dunn said: “I am delighted that Connect Group has recognised Tuffnells’ leading expertise and future growth prospects. By combining our businesses we will immediately benefit from opportunities to share skills and create synergies. We are already planning for strong standalone growth and expect there will be significant further benefits as we combine with Connect Group to deliver for the next phase of our development.”
Mark Cashmore, group chief executive of Connect said: “We are delighted to be announcing the acquisition of Tuffnells today, which we believe offers significant strategic and commercial opportunities for the enlarged group. The addition of Tuffnells will see us broaden our reach into an area of specialist distribution which complements our core skills and competences of time sensitive distribution with high levels of service and efficiency.
“The transaction is expected to be significantly earnings enhancing for our shareholders and accelerates our clearly articulated diversification strategy. The group remains focused on growing profits and generating free cash flow to support our progressive dividend policy.”
PwC’s corporate finance team advised the vendors of the sale, which was led by partner Coolin Desai.
