TIDMRMG
RNS Number : 4292O
Royal Mail PLC
08 October 2021
Royal Mail plc
(Incorporated in England and Wales)
Company Number: 8680755
LSE Share Code: RMG
ISIN: GB00BDVZYZ77
LEI: 213800TCZZU84G8Z2M70
8 October 2021
ROYAL MAIL plc (RMG.L): GLS AGREES TO ACQUIRE ROSENAU TRANSPORT
IN CANADA TO COMPLETE COVERAGE OF CANADIAN MARKET
Royal Mail plc (RMG.L) announces that its subsidiary, General
Logistics Systems (GLS), has agreed to acquire Canadian logistics
company Mid-Nite Sun Transportation Ltd (the 'Acquisition') one of
the largest independent freight carriers in Western Canada that
operates as 'Rosenau Transport'. The shareholders of Mid-Nite Sun
Transportation Ltd are (via holding companies) members of the
Rosenau family, the Rosenau Transport management team and their
families.
The combination of the two businesses will create a network
stretching across Canada which will enable GLS to cover the vast
majority of the Canadian population and deliver further growth and
synergies. It also provides a link to GLS operations along the US
West Coast, unlocking significant growth opportunities with new and
existing customers as the Rosenau Transport network moves to the
combined GLS freight and parcel model. There is also the
opportunity for revenue synergies by selling freight and parcel
services into/out of the Rosenau Transport network, including cross
border services.
The total consideration is C$360.0 million (approximately
GBP210.5 million) on a debt and cash free basis. The Acquisition
will be funded through existing cash and borrowing facilities and
is expected to be earnings and cash flow accretive to GLS and Royal
Mail Group in the current financial year ended 31 March 2022.
Rosenau Transport generated unaudited revenue of C$175.0
million(2) and EBITDA of C$41.6 million(2) in the 12 months ended
31 August 2021, with a mid-teens % operating profit margin. It has
24 owned facilities throughout four provinces, and as at 31 August
2021 gross assets were C$197.3 million(2) . The Acquisition is
subject to customary closing conditions and regulatory
approvals.
The addition of Rosenau Transport complements and enhances GLS'
strategy to deliver change and sustainable growth, through
strengthening the GLS international network and its position as a
cross-border player.
Canada is the world's 9(th) largest economy(3) with a combined
parcel and freight market of approx. C$25 billion(4) , growing
around 5% per annum(4) . GLS entered the Canadian market in August
2018 following the acquisition of Dicom. Today GLS Canada operates
a network of 2 hubs and 27 depots, with around 1,400 employees.
Since Dicom was acquired it has delivered revenue growth of around
8% p.a. with a mid-teens operating profit margin in FY2020-21.
Rosenau Transport will be fully consolidated within GLS for
reporting purposes after the transaction closes. The parties intend
to close the transaction on 1 December 2021 subject to customary
closing conditions and regulatory approvals.
Martin Seidenberg, Chief Executive Officer, GLS, said: "The
addition of Rosenau Transport to GLS complements and enhances our
Accelerate strategy. With its strong presence in Western Canada,
high quality, entrepreneurial culture, as well as freight
capabilities and parcel potential, Rosenau Transport's model is
similar to our existing Canadian business and provides an excellent
fit. I look forward to welcoming Ken and the Rosenau Transport team
to GLS and capturing the significant opportunities ahead of
us."
Rick Barnes, President of GLS Canada stated: "As we link two
regional carrier networks together, with direct service to most
cities and towns in the country, we will produce one of the most
integrated transportation systems in Canada. The extended
geographical reach will provide our 30,000 clients with a new,
national and international alternative for all of their shipping
needs".
Ken Rosenau, President Rosenau Transport commented "Rosenau
Transport is excited to join the GLS family and align with an
industry leading organization that will open new opportunities and
markets on a global scale. The combined networks of GLS and Rosenau
Transport will allow us to offer a comprehensive Canadian solution
to better serve our clients. We look forward to working closely
with Rick Barnes and the GLS Group to continue to champion our
company's motto - "Our Business is Built on Service, For our
Customers, For Each Other and For our Communities".
Enquiries:
Investor Relations
John Crosse
Email: investorrelations@royalmail.com
Royal Mail investor relations line: 020 7449 8183
Media Relations
Helen Reynoldson
Phone: 07483 302 245
Email: helen.reynoldson@royalmail.com
Mark Street
Phone: 07515 924 344
Email: mark.street@royalmail.com
Royal Mail press office: press.office@royalmail.com
Company Secretary
Mark Amsden
Email: cosec@royalmail.com
FORWARD-LOOKING STATEMENTS
This document contains certain forward-looking statements
concerning the Group's business, financial condition, results of
operations and certain Group's plans, objectives, assumptions,
projections, expectations or beliefs with respect to these items.
Forward-looking statements are sometimes, but not always,
identified by their use of a date in the future or such words as
'anticipates', 'aims', 'due', 'could', 'may', 'will', 'would',
'should', 'expects', 'believes', 'intends', 'plans', 'potential',
'targets', 'goal', 'forecasts' or 'estimates' or similar
expressions or negatives thereof.
Forward-looking statements involve known and unknown risks,
uncertainties and other factors, which may cause the Group's actual
financial condition, performance and results to differ materially
from the plans, goals, objectives and expectations set out in the
forward-looking statements included in this document.
All written or verbal forward-looking statements, made in this
document or made subsequently, which are attributable to the Group
or any persons acting on its behalf are expressly qualified in
their entirety by the factors referred to above. Accordingly,
readers are cautioned not to place undue reliance on
forward-looking statements. No assurance can be given that the
forward-looking statements in this document will be realised;
actual events or results may differ materially as a result of risks
and uncertainties facing the Group. Subject to compliance with
applicable law and regulation, the Group does not intend to update
the forward-looking statements in this document to reflect events
or circumstances after the date of this document, and does not
undertake any obligation to do so.
ABOUT GLS:
GLS, General Logistics Systems B.V. (headquartered in
Amsterdam), is one of the largest ground-based providers of
deferred parcel delivery services in Europe with a growing presence
in North America. GLS has a growing international footprint which
currently includes around 40 countries and nation states.
The 'Accelerate GLS' growth strategy builds on GLS' strengths
and addresses the growth opportunities in various markets. It has
three key objectives: strengthen GLS' top position in the
cross-border deferred parcel segment; strongly position GLS in the
2C parcel market, whilst securing its leading position in the 2B
segment; and implement innovative digital and sustainable solutions
that are centred around customer needs.
In FY2020-21, GLS generated GBP4,040m revenue (of which 9% was
from North America), which accounted for 32% of total Group revenue
(before intragroup eliminations) and GBP358m adjusted operating
profit (51% of total Group adjusted operating profit). GLS has
around 21,000 employees, 71(5) network hubs, c. 25,000 parcel shops
and c 1,500(5) depots.
Further information about GLS' strategy is included on pages 21
to 23 of our 2020-21 Annual Report.
1. GBP:CAD rate of 1: 1.7101
2. Prepared in accordance with the Accounting Standards for
Private Enterprises (ASPE) of Canada.
3. Source: The World Bank GDP ranking (2021).
4. Source: Company estimates.
5. Excludes Italian franchises.
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END
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