8th Oct 2021 08:00
(Alliance News) - Royal Mail PLC on Friday said its General Logistics Systems arm has agreed to buy Canadian logistics company Mid-Nite Sun Transportation for CAD360 million, or around GBP210.5 million.
Alberta, Canada-based Mid-Nite Sun is one of the largest freight carriers in western Canada, operating under the brand name Rosenau Transport. It generated revenue of CAD175.0 million - around GBP102.5 million - and earnings before interest, tax, depreciation and amortisation of CAD41.6 million in the 12 months ended August 31.
GLS is Royal Mail's parcels unit in Europe and North America. It entered the Canadian market in 2018 with the acquisition of Dicom, and now GLS Canada operates a network of 2 hubs and 27 depots, with around 1,400 employees.
"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," commented GLS Chief Executive Martin Seidenberg.
The purchase is on a debt and cash free basis, funded through existing cash and borrowing facilities, the postal operator noted. Mid-Nite Sun is expected to be earnings and cash flow accretive in the current financial year.
"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," said Royal Mail.
The deal will see a bumper payday for Mid-Nite Sun's owners, a group comprising members of the Rosenau family and the company's management team.
By Will Paige; [email protected]
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