Clipper Logistics acquires Tesam Distribution

Value-added logistics solutions and e-fulfilment provider Clipper Logistics announced the acquisition of the entire issued share capital of Tesam Distribution on Thursday.

The London-listed firm said Tesam is a provider of a “variety” of warehousing and distribution services to the retail sector.

It said the business, which operated from three sites in and around Peterborough totalling more than 1.1 million square feet of space, was established in 1984 and employed around 250 people.

Tesam was described by the Clipper board as a “strong and respected” business which had shown “consistent” profit growth over recent years.

In its financial year ended 30 June 2016, Tesam's audited accounts reported revenue of £19.6m, earnings before tax and interest of £1.8m and net assets of £3.1m.

The consideration was being funded in cash from Clipper's existing cash and bank facilities.

Clipper said the gross consideration paid was £11.75m, however the assets being acquired included cash of approximately £3.4m and a freehold property which would be sold post-acquisition and was expected to realise £2.7m net.

Tesam was principally owned by managing director Stephen Smith, who would become a consultant to the group following completion.

The other members of the management team would remain as full time employees of the business.

Tesam’s Peterborough operations were said to be “attractively located” with highly competitive cost bases.

Clipper said it planned to increase capacity at the key site at Ivatt Way through the installation of mezzanine floors and additional racking and handling capability.

That would “enhance” the ability of the group to implement its “strong” pipeline of new business. The acquisition of Tesam would be immediately earnings enhancing to the group, the Clipper board claimed.

“Tesam is a successful and robustly profitable and cash generative business which we have known for some time,” said Clipper executive chairman Steve Parkin.

“The acquisition, coupled with our planned investment in additional capacity, will enable us to offer existing and prospective customers of both Clipper and Tesam greater operational flexibility, and will provide further headroom for the delivery of our strong business pipeline.

“We welcome the employees and management team to the Clipper Group and look forward to continuing to build the breadth and depth of our services and customer base.”