The sale of a controlling stake in Pallet-Track to TPA Capital in March was heavily influenced by the arrival of a new wave of deep-pocketed owners within the sector, its MD has revealed.
Speaking exclusively to motortransport.co.uk, Nigel Parkes said that although there was an element of de-risking in his decision to sell some of his shareholding in the network to TPA Capital, “the catalyst was seeing an industry becoming more corporate”.
Ahead of the sale Parkes held 51% of the business but this now stands at a quarter. Commercial director Carl Jones, who held 24% of Pallet-Track shares ahead of the sale, has also reduced his holding. However, Pallet-Track’s approximately 90 members have seen their equal share of the network – collectively 25% – maintained.
“When we started the industry was independent, putting aside Palletways’ 3i backing. You gained or lost market share, developed your business etc. Each business had to operate on its own merits and fund its own development.
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“So I was always very comfortable that as Pallet-Track we were on a level playing field in regards to ownership structure and finance. Whatever schemes that [rivals] came up with the central business had to self-finance itself and couldn’t go crazy,” said Parkes.
However with EmergeVest buying Palletforce, the sale of Palletways to South African giant Imperial Logistics and Eddie Stobart Logistics’ purchase of The Pallet Network, Parkes realised the game had changed.
“When you introduce people at that level there are suddenly avenues open to you that would not have been before,” said Parkes. “I think there was an element of vulnerability… the industry as we know has a number of challenges to face over the next few years and I felt we were in an environment where we needed to start using those levers.”
Parkes embarked on talks with suitors towards the end of last year via introductions made by Clearwater International, but admits to not being overwhelmed initially, especially as he was adamant that an essential ingredient in Pallet-Track’s success was the members’ shareholding and that wasn’t up for negotiation.
Under no pressure to sell, and with the business debt free, Parkes was introduced to TPA Capital and its owners Greg Allen and Ravi Aujia late last year. They immediately clicked due to their hands-off investment approach and appreciation of the network’s culture.
“I decided that if there was no movement with TPA there wouldn’t be with anyone else,” said Parkes, who remains committed to the business he went live with in 2004.
The backing will enable the next milestone – a likely move from its Wolverhampton hub that has been home since 2008 to a new-build – within the next few years.
Image shows Pallet-Track board members: (L-R) Mark Waite, Mark Bailey, Gail Maltby, Julian Maturi, Nigel Parkes (fifth from left), Lisa Burrows, Carl Jones and Mark Pulford.
