Wincanton is to sell its records management business (WRM) to market specialists Restore for £60m after signing a conditional agreement.
WRM has provided document storage and shredding services across the UK and Ireland for over 14 years and currently employs 167 people. For the year ending 31 March WRM generated EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) of £5.4m on a turnover of £22.4m. It had gross assets valued at £22.2m.
Wincanton said that the disposal would allow it to focus on its core logistics business and the net cash proceeds will be used to reduce debt in the business. As of 31 March Wincanton had a net debt of £57.6m, down from a debt position of £107.6m in March 2013.
In a statement to investors today Wincanton said it expected that as a result of the transaction the ratio of average net debt to EBITDA will reduce to under two times “which is an important step for the group”.
Adrian Colman, chief executive at Wincanton, said: “The disposal of WRM realises material value for the group and allows us to make significant progress in reducing average net indebtedness, strengthening our balance sheet and providing greater capacity for future investment.
“Wincanton will be stronger, with a clear focus on its core skills and capabilities in logistics operations,” Colman added.
