Connect Group announces Tuffnells takeover

The firm said the deal is a “significant strategic opportunity” and would initially pay £113.4m for the Sheffield-based company, while a further £15.3m could also be paid depending the performance of the business over the next three years.

"We are delighted to be announcing the acquisition of Tuffnells today, which we believe offers significant strategic and commercial opportunities for the enlarged group,” group chief executive Mark Cashmore said.

"The addition of Tuffnells will see us broaden our reach into an area of specialist distribution which complements our core skills and competences of time sensitive distribution with high levels of service and efficiency."

Connect, which funded the deal with a £55m rights issue and extended debt facilities, said it expected "strong financial effects" of the transaction in its first 12 months, which would "substantially enhance" in the third year.

Tuffnells reported a £127.8m profit in the year to 31 December 2013, an 11.5% increase on the previous year.

"By combining our businesses we will immediately benefit from opportunities to share skills and create synergies,” Lloyd Dunn, managing director, said.

"We are already planning for strong standalone growth and expect there will be significant further benefits as we combine with Connect Group to deliver for the next phase of our development."