The owner of NFT Distribution, EmergeVest, announced that it is to acquire Palletforce for £30 million. The acquisition is being made by Forcefield Bidco, which has been formed for the purpose of making the Acquisition. The cash consideration payable under the acquisition will be financed by way of both funding to be provided by EmergeVest Fund B LP, and a new facilities agreement with Investec Bank plc.
Palletforce is a leading pallet network distribution business in the UK. The company has operations across Europe, in conjunction with partners in the Allnet consortium. Palletforce transports a range of palletised goods for overnight delivery, and maintains a 400,000 square foot central hub in Burton Upon Trent. Since the company was founded in 2001, it has grown at double digit rates, with total network revenue increasing to more than £77 million in the year ended 31 Aug 2014, and within that, hub revenues at more than £18 million.
Profits have also increased strongly each year and the Company achieved profits before tax of £3.1 million in the year ended 31 August 2014. Volumes continue to grow at a fast rate and in the six months ended 28 February 2015 the Palletforce network collected and delivered nearly 1.5 million pallets, an increase of 20 percent over the corresponding period in the previous year.
Network Membership has grown to its current level of 88 Member firms and has experienced a very low annual level of change since inception. Firms joining the network have historically been required to subscribe for shares in the company and become shareholders. A waiting list of prospective new members is maintained by Palletforce and a total of seven new Members have joined in the last twelve months.
Palletforce’s audited financial statements for the year ended 31 August 2014 showed that Palletforce’s reported revenue was £18.36 million (2013 £14.69 million), gross profit was £10.82 million (2013 £9.44 million) and profit before taxation was £3.07 million (2013 £2.58 million).
Michael Conroy, chief executive officer of Palletforce, commented: “The offer from EmergeVest will allow Palletforce to continue its class-leading quality service with a real focus on investing in the strong relationship we have with our network members. The move will allow us to write a new chapter in the company’s history as, in EmergeVest, 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.”
The acquisition is subject to shareholder approval and a legal process which will take a number of weeks to complete.
EmergeVest is particularly interested in investment opportunities in the supply chain, logistics and transportation sectors, especially in the United Kingdom and China. EmergeVest pursues investment opportunities that involve helping established businesses enter new markets; for example, assisting a UK-based business with entry into China. EmergeVest has a core team of investment professionals, supported by a broad network of senior advisors and industry executives. The team has particular insight and knowledge of business services, niche manufacturing and logistics.
Notes: Forcefield Bidco is a private limited company registered in England and Wales, which was incorporated on 16 July 2015 and has been formed for the purposes of making the Acquisition at the direction of, and is indirectly but wholly owned by, EmergeVest Fund B LP, a fund managed by EmergeVest GP B Limited, as general partner, and advised by EmergeVest Limited.
