Eddie Stobart Logistics has purchased The Pallet Network (TPN) for £52.8m.

The operator confirmed today (28 June) that it had entered into an agreement to acquire the share capital of the pallet network, which comprises 106 regional hauliers (members) on a cash and debt-free basis. It has done this, in part, via a £30m share placing with institutional investors (see finacing the deal below for more).

Eddie Stobart Logistics signaled its intention to investors earlier this month.

Alex Laffey, CEO at Eddie Stobart, said: “In line with our strategy, we are delighted to be able to invest in TPN as this significantly enhances the skills and capabilities of Eddie Stobart in a space that we currently do not operate in. Furthermore, it strengthens our position as a leading provider of end-to-end supply chain solutions.

“The TPN team, led by Mark Duggan, managing director, have continued to deliver strong growth since the business was founded in 2000, resulting in an excellent and strong service performance for customers.”

Laffey added that the members of TPN were experts in their own regions and had substantial experience of delivering final mile pallet solutions.

“During my discussions with TPN, I have been extremely impressed with the enthusiasm and expertise of the leadership team and members I’ve met so far. I am looking forward to working with them and I’m confident we will identify opportunities that will provide mutual benefit and grow both our networks,” Laffey said.

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Duggan, who will stay in his role, said: “Eddie Stobart has an ethos that fits with ours and share our long-term vision. Their investment has enabled the smooth exit of our previous investors and provides us with some immediate operational synergies for our member network.

“We have ambitious plans and this new partnership will help us achieve and deliver long-term sustainable growth.”


In a statement Eddie Stobart added: “This acquisition significantly enhances Eddie Stobart’s existing skills and capabilities, including meeting customer requirements for smaller load deliveries. It also positions Eddie Stobart in an attractive segment, which has grown at a significantly greater rate than the wider logistics market over the last three years.

“This combination will provide benefits to both businesses and to TPN’s members, through cross-selling to existing Eddie Stobart customers, and collaboratively deploying Eddie Stobart’s enhanced operating model into Europe.”

The acquisition provides an exit for TPN backers LDC, the private equity arm of Lloyds Banking Group.

Financing the deal

Eddie Stobart Logistics has issued more than 21,000 shares at a price of 140p per share, raising £30m before expenses (the remainder will be settled via the operator's debt facility) via institutional investors. The TPN deal sees £44.14m payable in cash with the remaining £8.66m payable to "certain sellers over a period of two years following completion". The sellers are listed as LDC, Neil England and the TPN management team of Mark Duggan, Paul Robinson and Mark Kendall. The deal is expected to complete on 29 June. TPN processed more than 3.9 million pallets in the year ended 31 March 2018 and unaudited revenue in the twelve months to 30 November 2017 was £108.9m with an adjusted EBITA of £5.8m.