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The big get bigger in a week of buy-outs
Page 6
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It's been a week of consolidation in road haulage with mergers and
acquisitions in the air. Dominic Perry and Jennifer Bail report.
THE HAULAGE INDUSTRY showed signs of increasing consolidation this week with the news of two major buy-outs and a large merger on the cards.
Hanging garment transport firm DTS Logistics has been snapped up by its Leeds-based rival Clipper Group, and Northern Irish operator McBurney Transport has increased its stranglehold on Irish reefer transport with its acquisition of local rival Joseph Baird.
Meanwhile, background talks are under way between logistics operators TDG and Christian Salvesen which could lead to a merger.
Although both sides are remaining tight-lipped, stressing that discussions are at a very early stage, it has long been suspected that the two would look to tie up a dealahis has become particularly urgent thanks to the acquisition activity of rivals, with first Wmcanton and then Exel fuelling significant growth with buy-outs.
Both TDG and, more particularly. Salvesen have experienced difficult times, with Salvesen somewhat rudderless since the departure of controversial chief executive Edward Roderick.
In a recent interview, TDG's chief executive David Garman was reluctant to talk about any potential bid for Salvesen, but indicated that the firm was not ruling anything out.
Alastair Gunn, transport analyst at Arbuthnot Securities, says the move comes as little surprise: "It makes sense, although whether it will happen or not is a different matter. TDG is in a position of weakness, particularly since the Exelfribbet & Britten tie-up has raised the bar for everybody.
"It's the most domestic of the quoted stocks and most of the growth is really overseas, not in the UK. This gives them the opportunity to scale up without management issues getting in the way.
However, he adds that the main stumbling block to any merger would be the predatory interest of their rivals, particularly Wincanton: "They would gain bigger synergies through the merger by combining their businesses in Spain and France and filling up unutilised space,which isn't really an option for TDG.
"They are also able to come out with a price for Salvesen shareholders that's more attractive than TDG can manage." he concludes.
Clipper Group has been on the acquisition trail: its absorption of DTS Logistics forms a 56m group in the garment transport sector.
The deal will see the DTS branding retained within the Clipper Group, which also includes high-value good transporters Gagewell and Guardex.
Clipper Group's CEO Steven Parkin says the merger will enable it to tender for larger contracts, which it was previously prevented from doing by its size and limited geographical reach. "DTS fits perfectly into our strategy of building the Clipper Group into one of the strongest independent logistics groups in the UK," he adds. DTS's clients include Allders, Liberty, Debenhams and Next.
And in Ulster,McBurneyTransport of Ballymena. Co Antrim has become the biggest player in refrigerated haulage in Ireland with the purchase of Joseph Baird of Craigavon, Co Armagh.
McBurney's MD Norman McBurney says he is delighted by the acquisition: "The business profile of Bairds fits nicely with the McBurney Transport contracts," he explains.
The deal includes the purchase of Baird's fleet of 25 trucks and 45 refrigerated trailers.