Royal Mail PLC Royal Mail plc acquires Dicom Canada (5326Z)
03 September 2018 - 9:00AM
UK Regulatory
TIDMRMG
RNS Number : 5326Z
Royal Mail PLC
03 September 2018
3 September 2018
ROYAL MAIL PLC ACQUIRES CANADIAN PARCEL DELIVERY COMPANY, DICOM
CANADA
Royal Mail plc (RMG.L) announces that its subsidiary, General
Logistics Systems (GLS), has acquired Canadian parcel delivery
company, Dicom Canada, (the 'Acquisition') from Wind Point
Partners, a Chicago-based private equity firm.
Dicom Canada primarily provides business-to-business parcel
services, operating across Canada, with a major focus on the
Eastern Canadian provinces of Ontario and Quebec. Canada is the
world's 10(th) largest economy[1], with Ontario and Quebec
representing 57 per cent of the country's GDP[2]. Dicom Canada is
well-placed to leverage growth trends in these markets and provides
GLS with an established market position in this key economy.
Dicom Canada offers ground-based parcel, freight and logistics
services. It operates a network of 28 depots and works with partner
carriers across Canada to provide pan-Canadian logistics services.
Dicom Canada has experienced good revenue and profit growth in
recent years. The Acquisition does not include Dicom's US
business.
The total consideration is C$360 million (approximately GBP213
million[3]) on a debt and cash free basis. The Acquisition will be
funded through existing borrowing facilities and is expected to be
earnings and cash flow accretive to Royal Mail Group in the
financial year ended 31 March 2019. Dicom Canada generated
unaudited revenue of C$233 million in the 12 months ended 30 June
2018. The Acquisition is not subject to regulatory approvals.
Dicom Canada will continue to be led by Rick Barnes, President,
together with Dicom Canada's existing management team. Dicom Canada
will be fully consolidated within GLS for reporting purposes.
GLS provides geographic diversification for Royal Mail Group's
earnings and is a growth engine for the Group. It is expanding its
presence in European markets and through targeted and focused
acquisitions elsewhere. In 2017-18, it accounted for 33 per cent of
the Group's adjusted operating profit after transformation costs,
up from 29 per cent in the financial year 2016-17.
Rico Back, Chief Executive Officer, Royal Mail Group, said:
"This Acquisition is in line with GLS' strategy to grow through
targeted and focused acquisitions to capture higher growth segments
outside Europe. With its strong presence in Eastern Canada and
primary focus on the business-to-business segment, Dicom Canada's
business model is similar to GLS' as it provides a high quality
delivery service, based on its focus on reliability and excellent
customer satisfaction."
Ends
Royal Mail plc
Company Secretariat
Kulbinder Dosanjh
Phone: 020 7449 8133
Email: cosec@royalmail.com
Media Relations
Rebecca Hammond
Phone: 07841 103 824
Email: rebecca.hammond@royalmail.com
GLS
Anne Putz
Phone: +49 (0) 172 1781 105
Email: anne.putz@gls-germany.com
Investor Relations
Catherine Nash
Phone: 020 7449 8183
Email: investorrelations@royalmail.com
LEI 213800TCZZU84G8Z2M70
About GLS Group
GLS, General Logistics Systems B.V. (headquartered in
Amsterdam), provides reliable, high-quality deferred parcel
services for over 270,000 customers, complemented by logistics and
express services. Through wholly owned and partner companies, the
Group provides a network coverage of 41 European countries and
nation states and eight U.S. states and is globally connected via
contractual agreements. Over 70 central and regional transhipment
points and more than 1,000 depots are at GLS' disposal. With its
ground-based network, GLS is one of the leading parcel service
providers in Europe. In the financial year 2017-18 GLS achieved
revenue of GBP2.56 billion, and accounted for 33 per cent of Royal
Mail plc's adjusted operating profit after transformation costs, up
from 29 per cent in the financial year 2016-17.
About Royal Mail plc
Royal Mail plc is the parent company of Royal Mail Group
Limited, the leading provider of postal and delivery services in
the UK and the UK's designated universal postal service provider.
UK Parcels, International & Letters (UKPIL) comprises the
company's UK and international parcels and letters delivery
businesses operating under the "Royal Mail" and "Parcelforce
Worldwide" brands. Through the Royal Mail Core Network, the company
delivers a range of parcels and letters products, including the
one-price-goes-anywhere Universal Service products. Royal Mail has
the capability to deliver to more than 30 million addresses in the
UK, six days a week (excluding UK public holidays). Parcelforce
Worldwide operates a separate UK network which collects and
delivers express parcels. Royal Mail also owns General Logistics
Systems (GLS) which covers 41 countries and nation states in Europe
and eight states in the Western U.S.. GLS operates one of the
largest ground-based, deferred parcel delivery networks in
Europe.
About Dicom Canada
Dicom Canada is a transportation and logistics company
headquartered in Montreal, Quebec. Dicom Canada operates three
business segments: Express, Freight and Logistics. Services
provided include overnight and second--day parcel, freight
transportation, freight management and last mile services in the
U.S. and Canada. Dicom Canada employs around 1,400 people directly
and uses sub-contractors across some parts of the business.
[1] The World Bank GDP ranking (2017)
[2] Statistics Canada (2017)
[3] GBP:CAD rate of 1:1.69
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END
ACQUOVNRWUAKRRR
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