Xpediator takes delivery of Regional Express in £1.2m acquisition
Xpediator
43.75p
16:55 06/07/23
Freight management services provider Xpediator has acquired Regional Express, a UK-based freight forwarder and international courier, it announced on Monday.
Industrial Transportation
3,914.47
17:14 01/07/24
The AIM-traded firm said the initial consideration payable on completion was £1.2m, comprising £1.08m in cash and £0.12m in new Xpediator ordinary shares.
A further cash payment reflecting Regional's working capital position at completion was also to be made, estimated to be approximately £0.13m, with further consideration of up to £0.7m in cash also possibly payable contingent on the future trading performance of Regional Express.
Regional Express generated revenue of £6.0m, operating profit of £0.25m and profit after tax of £0.2m during the year to 31 March, Xpediator reported.
Adjusted operating profit in the 2017 financial year were £0.31m, normalising for “exceptional items” and non-recurring costs.
Xpediator said cash consideration would be funded from existing resources.
Regional Express was described by the Xpediator board as an “asset-light” operation, providing B2B international road, sea and air freight services from their bases in Dorset and Hampshire.
It is an approved service provider to Amazon Global Selling, providing “competitive” door-to-door services, VAT registrations and freight forwarding services.
On completion, the enlarged group would operate from six sites in the UK together with 11 European offices, employing more than 690 people.
The acquisition was expected to be immediately earnings enhancing, Xpediator confirmed.
It would be the company's second acquisition since IPO, and - like Benfleet Forwarding - was identified as a corporate target in the company's admission document.
“Regional Express is an exciting profitable niche operator and one which will fit well into the Xpediator Group, adding significantly to our existing air and sea freight operations, two areas where we have been looking to expand our presence,” said Xpediator CEO Stephen Blyth.
“We also expect there will be a number of synergistic opportunities through offering Regional's clients the wider services of the Xpediator Group in particular in warehousing and fulfilment, plus our European Network.”
Blyth said Regional's growing business with Amazon was a “key attraction” for Xpediator, and one which would increase its exposure to the fast growing e-commerce market.
He said there was potential for Regional to develop the relationship further with Amazon, with the board believing that would be “enhanced” by Regional becoming part of the enlarged group.
“We are very pleased that Regional will be led by Neil Curran, who will continue to be mentored by Eric Buggy over the earn out period.
“Neil is a very experienced freight forwarder and has the necessary ambition to drive the company forward.”
Blyth also noted that Xpediator has been in dialogue with Regional since before its IPO in August, adding that he was “delighted” that the transaction had been concluded.
“I feel confident the business will be significantly earnings accretive for our shareholders.”
Eric Buggy, founder of Regional Express, said his company had grown “impressively” in recent years, benefitting in particular from services provided to the e-commerce sector - although the board had recognised its needed to share a larger platform to maintain that growth.
“As part of the Xpediator Group, we are confident of further growing our operations from leveraging their larger platform, and in particular, the award winning EshopWedrop division.
“Equally important was finding a partner who shares our focus on high customer service, strong customer relationships and an entrepreneurial flair; in the Xpediator team, we have found such a partner.”