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Fresh from making one acquisition, logistics group John Menzies is in talks regarding another deal.
It is holding discussions with DX about hiving off its distribution division, and combining it with its smaller UK rival to create a bigger logistics and parcel delivery service.
Under the mooted deal, DX would acquire Menzies Distribution for £60m in cash plus new DX ordinary shares, with John Menzies shareholders owning around three quarters of DX’s issued shares, although the groups stressed that talks are still under way.
Greg Michael and Paul McCourt, managing director and finance director at Menzies Distribution, would become the chief executive officer and chief financial officer of the new unit. Both companies estimate annual synergies of between £8m and £12m.
From the statement:
The boards of DX and John Menzies believe that the combination has strong strategic logic for all stakeholders and represents an opportunity to deliver significant value to both companies’ shareholders.
DX has been beset by sluggish growth in recent months and separately on Friday announced a pre-tax loss of £29.3m in the six months to December last year, albeit one narrower than the £87.1m loss recorded a year earlier. Revenue of £142.7m was basically flat.
Scotland-based Menzies, once known as a high-street newsagent before selling its stores to WH Smith, is focusing on aviation services having bought ASIG, a leading provider of fuel management services at leading international airports, in a $202m deal last September.