The £49.3m deal follows a partnership between the two companies earlier this year, which saw Menzies becoming InPost’s exclusive logistics provider in the UK.
By Liz Wells
Parcel locker service InPost has agreed to buy a 30% stake in much-hated news wholesaler Menzies Distribution for £49.3m.
The deal comes after a partnership between the two companies earlier this year, with Menzies becoming InPost’s exclusive logistics provider in the UK.
As a result, InPost has a three-year option to acquire the remaining 70% equity stake, exercisable at any time during the option period. In addition, InPost will have two non-executive seats on the Menzies board of directors, which will allow it to have influence over key strategic decisions but not over the day-to-day operations of the company.
History
Edinburgh-based Menzies Distribution was previously part of John Menzies, one of Scotland’s oldest companies dating back to 1833, but in 2018 the company sold off its distribution business to focus on aviation activities.
Now Menzies has a national network of more than 100 depots that sees it deliver to over 47,000 locations every day. Menzies provides newstrade distribution services, B2B final-mile parcel delivery and full-load transportation and warehousing solutions. The business employs approximately 5,000 people and runs more than 3,200 vehicles.
As a result of the InPost deal, Menzies’ ownership structure is as follows: 52% of the equity stake and voting rights is held by private equity company Endless; 30% is held by InPost; and 18% is held by other shareholders, including the current management of Menzies.
Meanwhile, InPost, which pays retailers £800 + VAT per year for installing a 2m locker on their property, has also recently entered into agreements with Transport for BP, Greater Manchester, Morrisons, Vinted, and WHSmith to install lockers on their sites. It claims the number of customers visiting its lockers has more than trebled year on year. InPost’s growth means nearly half of residents in Birmingham, Manchester and London live within a seven-minute walk of an InPost Locker.
Currently, more than 5,000 convenience stores and other sites in the UK now have an InPost parcel locker, the company said in March.
Benefits
The companies say the agreement will mean that InPost will have the ability to scale at speed to match increasing consumer demand; consumers will have a secure, low-cost and environmentally sustainable way of sending and receiving parcels; suppliers and publishers will have a fast, cost-effective, secure and sustainable route to the consumer; and retailers will have a new national sustainable and efficient alternative route to market.
InPost will also be able to leverage operating synergies, including using existing routes and cross-utilisation of assets, and use the company’s capability to provide deliveries over 360 days a year.
Rafał Brzoska, Chief Executive of InPost, said: “With this strategic transaction, we have reached a significant milestone, which represents an exciting opportunity for both our UK business and InPost Group as a whole. With Menzies, we can offer a unique service in the UK e-commerce market by delivering parcels over 360 days a year. We look forward to the transformative impact of this partnership.”
Michael Rouse, Chief Executive International at InPost, says the relationship marks an important next step in InPost’s journey as it looks to strengthen its position as the UK’s leading out-of-home delivery provider.
“Acquiring a minority stake in Menzies will enable us to work as one with our distribution partner, sharing the same vision and ensuring that we aim for the same result,” he says.
“Menzies has one of the largest time-critical delivery networks in the UK and we are excited by how the collaboration will enable us to accelerate our growth and the service we can offer our customers.”
Greg Michael, Chief Executive of Menzies, added that the company is excited about the opportunities the partnership will create for its clients, business, and its people.
“InPost and Menzies are uniquely positioned to deliver fast, sustainable delivery and returns in the UK benefiting consumers, retailers, suppliers and our colleagues. We look forward the future and supporting InPost’s next phase of growth in the UK.”
New horizons
During a meeting with journalists, InPost Group Chief Financial Officer Adam Aleksandrowicz said the deal is a catalyst that may even allow it to accelerate the growth of its parcel locker network. “Our medium-term forecast is that we want to have 15,000 parcel lockers in the UK in a five-year horizon,” said Aleksandrowicz, quoted by the ISBnews agency.
