John Menzies divests Menzies Distribution

John Menzies has divested its Menzies Distribution business to private equity investor Endless LLP for £74.5 million.

The former distribution arm of John Menzies has a turnover of £1.1 billion and employs 3700 people across 56 sites. It distributes more than 7 million newspapers and magazines daily around the UK.

John Menzies tried to merge Menzies Distribution with DX Group in 2017 but this failed after DX’s largest shareholder pulled the plug on the deal.

Menzies Distribution was then put up for sale but in May 2018 its parent company warned that a sale was taking longer than expected. In a trading update, the group said: “As detailed in our final results a sale process for Menzies Distribution is in progress, this process is taking longer than we anticipated but we remain fully engaged with a number of potential buyers.

At present Menzies Distribution’s strategy is to mainly focus on its core business of working with publishers around the UK, and at the same time growing in the adjacent markets such as e-commerce delivery.

Managing director Greg Michael said: “This is great news for Menzies Distribution.  While it’s business as usual, becoming an independent company enables us to be in control of our own destiny and reinvest to fulfil our ambitious growth and diversification plans for the business.

“The recent major UK-wide primary trunking contract to collect and deliver all daily and regional weekly newspapers printed by Reach plc is as an example of our successful diversification strategy in action.”

Aidan Robson, partner at Endless said: “Menzies Distribution represents Endless’ largest investment to date and is a hugely exciting acquisition.”

The deal leaves John Menzies as a pure-play aviation services company. Chief executive Forsyth Black said: “I believe we are well-placed to deliver our growth ambitions in the structurally growing aviation services market and I am very proud to now lead the business forward as its CEO together with the support of my team.”