Private equity giant Apollo has reached a ’definitive agreement’ to buy Evri from Advent International in a £2.7bn deal.
Apollo is reported to have won out in a fight to acquire the parcel giant involving Chinese internet group JD.com and DHL.
Apollo’s private equity business has a long track record spanning more than 30 years and significant experience in the transportation and logistics space.
The Evri transaction is expected to close in the third quarter of 2024. Financial terms were not disclosed.
Apollo Private Equity partner Alex van Hoek said: “Evri has built an enviable position in parcel delivery, with an innovative model, technology and infrastructure purpose-built for reliable, lower emissions delivery in the fast-growing e-commerce market. We are delighted to partner with Martijn and the management team to support and invest in Evri’s continued success and expansion as an Apollo fund portfolio company.”
Added Evri chief executive Martijn de Lange: “We are incredibly proud of the transformative changes that have enabled Evri to efficiently scale while maintaining our focus on on-time delivery and an environmentally responsible model.
”We want to thank the team at Advent for their partnership over the past five years and providing the business with a strong foundation for continued expansion. In this next chapter we are excited to partner with the Apollo team to execute on the compelling growth opportunities we see ahead.”
Evri, which was founded in 1974 as the delivery network of the Grattan catalogue, has around 20,000 self-employed drivers and employs almost 7,700 staff at its head offices and warehouses. The group has experienced exponential growth over the past five years, tripling its size, sometimes at the cost of Yodel.
The impact of the Covid-19 lockdowns, which turbocharged internet shopping, saw Evri sales soar. The courier currently has around an 18% share of the UK market, delivering 720 million parcels a year in total. In 2022 it paid out a record £762m dividend to shareholders.
However, the impact of the Ukraine War, combined with the cost of living crisis, rising inflation, an industry skills shortage and a return to high street shopping have all taken their toll.
In the year to 25 February 2023, the parcel delivery giant saw revenue flatline at £1.464m (2022: £1.465m) while pre-tax profit tumbled by 56% to £51m (2022: £117m).
In addition, net debt has risen almost tenfold to £1.3bn under Advent’s ownership, boosted by higher interest costs. It is now six times Evri’s underlying profits.
Like Yodel, Evri has also struggled to deliver on customer service. In 2023, a MoneySavingExpert survey ranked Evri as the worst parcel delivery firm in the UK, ahead of Yodel, despite Evri having delivered 98% of next-day deliveries on time and 99% of standard deliveries on time.
