Tuesday, July 10, 2018

Another Contract Logistics and Warehousing Company Acquired by Freight Forwarding Group  

Fourth Purchase Since Joining AIM in August 2017

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Shipping News Feature UK – As we reported last month, logistics group Xpediator has been positively avaricious when it comes to acquiring freight forwarding outfits, particularly in its home county of Essex. After the two purchases of Benfleet and Anglia Forwarding there the group has returned to Hampshire, where it bought Regional Express in 2017 and has now picked up contract logistics warehousing outfit Import Services Limited (ISL) for a total consideration of around £12 million.

ISL has warehouse facilities located within the Port of Southampton and focuses on 3PL contracts, particularly with a focus on clients who service leading brands in the toy, leisure and sports sectors. The move means an additional 40,000 m2 for Xpediator and a further boost to its freight forwarding portfolio.

The financial details are an initial consideration payable on completion of the acquisition of £9 million to be settled by the payment of £6 million in cash and £3 million by the issue of new Xpediator ordinary shares. There will be a further consideration of up to £3 million in cash which is contingent on the future results of ISL and the value of Xpediator shares at 29 May 2020.

Xpediator say the deal gives it the opportunity to combine the group’s existing Southampton facilities and activities with ISL creating long-term cost efficiencies whilst positioning it to benefit from any upturn in international trade as a result of Brexit alongside the Group’s port based operations in Felixstowe, including an opportunity to develop a further 20,000 m2 of warehousing inside the port.

The deal locks ISL senior management in for at least two years and Xpediator Chief Executive Stephen Blyth was clearly happy with the deal, commenting:

“ISL shares similar characteristics to our previous transactions in that it is a well- established, profitable business which is operating in complementary but sufficiently distinct areas to add to both Xpediator’s profitability and service capabilities. ISL’s position within the Port of Southampton, in particular, is a significant commercial advantage upon which the enlarged Group can expand.

“It is a natural fit with our business, as there is scope to combine our existing facilities in Southampton, expand our capabilities around port services and provides an opportunity to occupy a further 20,000 square metres of warehousing space in the future. The combination of these factors make us confident that ISL will be a strongly earnings accretive acquisition for the Group.”

ISL was established in 1984 and has grown revenues (from continuing operations) from £18.7 million for the year ended 31 December 2015 to £20.2 million for the year ended 31 December 2016 and £21.7 million for the year ended 31 December 2017. Commenting on the acquisition, John Eynon, Chief Executive of ISL said:

“Over the last 34 years, ISL has grown to become a leading independent port-centric logistic company in the UK. We are confident, as part of the Xpediator group, the business will continue to grow, providing a bright future for ISL’s employees, clients and suppliers.”

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