Palletforce is to be taken over in a £30 million deal by EmergeVest, the private equity firm that bought NFT Distribution last year.
The pallet network operator had a total network revenue of £77.7m in the year to 31st August 2014. Turnover of Palletforce plc was £18.4m compared to £14.7m the year before. Operating profit was £3m – up from £2.47m the year before. It said that volumes in the first six months of the current financial year increased by 20 per cent.
John Brotherton, chairman of Palletforce, said: “This acquisition will bring new opportunities for the Palletforce business and represents a superb return for shareholders. The needs of our network members have been uppermost in our discussions with EmergeVest and they can be confident that their interests have been respected. I am convinced that the highly successful management team at Palletforce will take this business to new heights. EmergeVest will be a supportive partner to them and our members.”
The deal is dependent upon shareholder approval. EmergeVest says it is committed to retaining and developing the existing business model and to uphold the partnership values with Palletforce network members.
As well as NFT Distribution, EmergeVest has interests in Allport Cargo Services, a global freight forwarder. The business, which is led by Hong Kong-based Heath Zarin, has more than US$300 million of assets under management
Zarin said: “We have extensive experience in the transport and logistics sector via our participation in Allport Cargo Services and NFT Distribution. We are very impressed by the Palletforce management team and its network members. We look forward to working with all stakeholders to continue the successful development of the business.”
Michael Conroy, chief executive officer of Palletforce, said: “I believe we have the ideal partner to help us open up exciting new market and commercial opportunities, especially across Asia. Our vision is for Palletforce to become the world’s leading pallet network and today’s news takes us one step closer to that goal.”
John Brotherton has been chairman of Palletforce since 2008. He started his career at Ford, before joined Swift Transport Service in 1979, where he increased turnover from £2million to £110million – with the number of staff rising from 110 to 3,000.
Following the merger of Swift into the LEP Group in 1986, Brotherton became CEO of the LEP-Swift pan-European distribution network, whilst retaining the roles of chairman and CEO of Swift. He then became Worldwide CEO of LEP’s logistics and distribution operations.
In 1991 Brotherton led the management buyout of Swift, which was sold two years later for £85million to Christian Salvesen (now part of XPO Logistics) – making it, at the time, the most successful UK-based management buyout in terms of increased equity.