Menzies Distribution has sealed a £24.65m deal with property investment company Custodian REIT for the sale and leaseback of eight ‘last mile’ distribution centres.
The eight properties are located in Aberdeen, Edinburgh, Glasgow, Ipswich, Norwich, Stockton-on-Tees, Swansea and Weybridge and will be leased back to Menzies Distribution on new 10-year leases.
Custodian REIT acquired the portfolio by purchasing the entire issued share capital of John Menzies Property 4 Limited which owns the eight units.
Menzies Distribution, which specialises in print media logistics, was bought for £74.5m by private equity firm Endless in September 2018. At the time the purchase was hailed by Menzies Distribution management as a move which would allow them to continue to grow the company and diversify into the parcels sector.
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The company operates across 1,700 routes a day from over 50 sites across the UK and Ireland.
Commented Greg Michael, chief executive of Menzies Distribution: "Since our acquisition by private equity firm Endless LLP in September 2018, the company has invested heavily into the retail logistics and parcel delivery markets. In July 2019 the company opened its new 170,000 sqft super-hub in Coventry which, together with its existing 55 depots, has given Menzies Distribution a market leading national footprint, covering from the highlands of Scotland through to its 100-strong electric vehicle fleet in central London.
"This transaction is a further positive step forward for Menzies Distribution, which will support and accelerate our continuing strategic and operational diversification over the coming months.”
Added Paul McCourt, chief financial officer of Menzies Distribution: “In January 2019, we announced a new 5-year Revolving Cash Facility with RBS amounting to £25m which has yet to be utilised. With the continued profitability of the company since its sale from John Menzies plc in September 2018, and the generation of a further £25m in cash proceeds from this latest property transaction, the company has built a strong balance sheet to support our continued growth ambitions both organically and through acquisition.”
