Suttons Group buys Hargreaves' Imperial Tankers

Widnes-based Sutton Group has acquired Imperial Tankers, the bulk chemical transport arm of Hargreaves, creating a single bulk tanker fleet of some 700 units with a combined turnover of approximately £114m from UK operations alone.

Suttons bought the subsidiary of Hargreaves for £26.9m, with Hargreaves having purchased the tanker firm – which traces its lineage back to an MBO of ICI’s former tanker operations in 1989 – in 2007. Two years later it added Stockton-on-Tees firm Stiller Tankers to the business.

The deal adds a further 200 trucks and 350 tanker trailers to Suttons fleet and CEO John Sutton described the deal as an ideal fit: “Our joint depot network will enhance our ability to provide an outstanding service to customers in key production regions around the country.

“Our combined fleet of over 700 road tankers gives us an even greater ability to support our customers through times of peak demand and react rapidly to changing customer requirements. By combining the various services offered by each company, we will be able to provide a truly exceptional customer experience that is focused on safety, service and innovation,” he said.

In the financial year ending 31 May 2013 Imperial Tankers achieved a pre-tax profit of £1.5m on a turnover of £29.25m (down slightly from the previous financial year turnover of £31.6m and pre-tax profit of £2.2m).

Hargreaves told investors that the business unit will be sold inclusive of cash balances of £1.6m and £2.7m of asset finance debt, resulting in an effective enterprise value and reduction in overall net debt of £28.1m. The book value of Imperial Tankers in the Hargreaves Group accounts was approximately £9.5m.

Gordon Banham, CEO of Hargreaves, said: “The very favourable valuation reflects the quality of the business and strong recent growth. I am pleased that the business has been sold to a high calibre operator who is seeking to invest in expansion and is well placed to drive synergies from the business, which the Hargreaves Group is unable to access. This is a good outcome both for the Group and for the management and employees of Imperial Tankers.

“Following the disposal we will be left with the fleet of dry bulk vehicles,” he added. “This will remain a key part of the group to drive synergies with our trading and production activities.” Hargreaves has stated its intention to be the UK’s leading coal production, trading and distribution company.

In the financial year ending 30 April 2013 Suttons had a turnover generated by UK activities of £69.46m.

Suttons also derived a further £85.2m from its international businesses and, last week, acquired Singapore-based IS Logistics Group. In October 2013 Suttons completed the purchase of Chinese transport firm Hanchi Logistics.