Connect to pay up to Â£130m for Tuffnells
Sheffield-headquartered Tuffnells Parcels Express has been acquired by Connect Group in a deal which could be worth almost £130m.
Connect said the deal is a "significant strategic opportunity" and would pay an initial consideration of £113.4m for Sheffield-headquartered Tuffnells. A further £15.3m will also be payable subject to the performance of the business over a three-year period.
Connect, previously known as Smiths News, funded the acquisition with a £55m rights issue and recently extended debt facilities.
It said it expects "strong financial effects" of the transaction in its first year, which would "substantially enhance" in year three.
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."
Tuffnells provides B2B freight services across the UK from 34 national depots. It delivers more than ten million parcels per year to 4,200 customers.
The company turned over £127.8m in the year to 31 December 2013, an 11.5 per cent increase on the previous year.
Lloyd Dunn, managing director of Tuffnells, added: "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."
PwC's corporate finance team, led by partner Coolin Desai advised the vendors of the sale.