Acquisition of Servicecare Support Services Ltd

4 December 2014

Acquisition of Servicecare Support Services Ltd

Clipper Logistics plc ("Clipper" or "the Company"), a leading provider of value-added logistics solutions and e-fulfilment to the retail sector, is pleased to announce the acquisition of the entire issued share capital of Servicecare Support Services Ltd ("Servicecare") for a cash consideration of £5.7m.

Servicecare is a specialist provider of returns logistics services to consumer electronics manufacturers and retailers. The business, which operates across the United Kingdom from sites in Oldham, Greater Manchester and Barton, Burton-on-Trent, has been trading since 1995 and has a strong client base that includes Argos, Richer Sounds, Panasonic, Shop Direct Group and Tefal. Its wholly owned subsidiary Electrotec International Ltd was acquired by Servicecare in 1999 and trades as a retail supplier, selling refurbished consumer electrical goods.

In its financial year ended 30 September 2013, Servicecare's audited accounts reported revenue of £10.4m, profit before tax of £1.0m and gross assets of £3.9m. Financial performance for the year to 30 September 2014 showed profit before tax of £1.2m on revenue of £10.8m (unaudited).

The consideration is being funded from Clipper's existing cash and bank facilities. Of the total cash consideration of £5.7m, £3.7m is payable at completion, with £1.0m due 6 months after completion and a further £1.0m due 12 months after completion.

Servicecare was principally owned by CEO Jerry Day, MD Dave Aspin and Business Development Director Gary Furness. Dave Aspin will continue in his current role post-acquisition, while Jerry Day and Gary Furness will remain with the business in a consulting capacity for up to 12 months post-acquisition.

In the financial year to 30 April 2014, Clipper launched its "Boomerang" brand, which was introduced to focus on the growing requirement for returns management services by the clothing and non-electrical general merchandise sectors. As part of the Group's strategy to enhance its Boomerang services to both new and existing customers, the Board has sought to identify potential acquisition targets that would enable the Boomerang service offering to be expanded to cover electrical goods. With its long trading history and blue-chip client base Servicecare is a strong fit within the Boomerang brand and it is expected that the business will be immediately earnings-enhancing to Clipper.

Steve Parkin, Executive Chairman of Clipper commented:

"The purchase of Servicecare is an important step towards broadening the Boomerang brand. The returns arena is the battleground for competitive advantage and we are delighted to add a further string to our bow. Servicecare is a successful and profitable business with an impressive blue chip client base that complements Clipper's already strong market position and long-standing relationships with retailers."

 About Clipper

Founded by Steve Parkin in 1992, Clipper is amongst the leading providers of value-added logistics solutions and e-fulfilment to the retail sector in the United Kingdom, with an expanding business in Germany and employs over 2,500 people. The Group provides consultancy-led services within the online fashion and non-food sectors to its blue chip client base including ASOS, The John Lewis Partnership, Asda, SuperGroup, Morrisons, New Look and Tesco.