Released Monday 10th March 2008
STOBART GROUP MAKES FIRST ACQUISITIONS.
• Stobart is set to acquire James Irlam & Sons and WA Developments, and proposes an option agreement to acquire Carlisle Airport
• A placing and open offer of new Ordinary Shares is proposed to raise £75m to fund the cash consideration of the acquisitions
• The enlarged Stobart Group will have net assets of over £320m and will bring financial, operational and environmental benefits for its customers and more opportunities for employees
• Acquisitions represent another step towards establishing Stobart as the UK’s leading multimodal transport and logistics provider
The Stobart Group Limited (“Stobart”), the leading provider of multimodal transport and logistics solutions, has today announced its first acquisitions since listing on the stock market in September 2007. Stobart proposes to acquire James Irlam & Sons (“Irlam”) and two smaller acquisitions, alongside a placing and open offer of new Ordinary Shares.
The Irlam Group, one of the largest independently owned road transport logistics providers in the UK, is set to be acquired for the consideration of £59.9 million (£36.2m cash, £10.0m shares and £13.7m in loan notes). Based in Chelford, Cheshire, Irlam provides transport, warehousing and contract packing services for blue chip companies including Proctor & Gamble, Danone Waters and Pedigree.
Irlam will complement Stobart’s existing business operations, increase efficiency, add significantly to the scale of core transport and storage business, and enhance its customer base. The acquisition brings a strong and proven operational team of managers with whom Stobart has a long-standing working relationship, including David Irlam (Chief Executive Officer) who will join the Group’s board. As a result of the acquisition, Stobart will operate more than 1,300 trucks, 2,300 trailers and employ over 3,500 people.
WA Developments, a transport infrastructure engineering specialist, has been advising Stobart on the redevelopment of the Group’s inland port operation in Widnes and potential port operation in Runcorn. The proposed acquisition, for a consideration of £10 million in cash, will bring vital infrastructure capability and expertise in-house for the continued development of Stobart’s multi-modal transport offering.
Stobart also proposes to enter into an option to acquire Carlisle Airport for the consideration of up to £15 million (£2.5m in cash and £12.5m in shares). Carlisle Airport owns 460 acres of land in Carlisle, on which Stobart proposes to build a new logistics centre to consolidate its facilities in the region, subject to planning permission.
The acquisition offers the Group the potential to develop aviation activities, including air freight, from the site in the future. The decision to acquire the site is subject to a comprehensive appraisal with feasibility and valuation studies. Upon conclusion of the appraisal the Board will decide whether in the best interests of the Company to seek shareholder approval to exercise the Carlisle Airport option.
Rodney Baker-Bates, Chairman of Stobart Group Limited, commented: “These proposals represent another step towards establishing Stobart as the UK’s leading multimodal transport and logistics provider. James Irlam & Sons is a company with a strong track record for solid delivery and first class customer service with an operating ethos very similar to that of Eddie Stobart. The Board is pleased to welcome David Irlam as an Executive Director and is confident that his experience will be valuable in helping the company deliver sustainable growth.”
“The acquisition of WA Developments and the option to purchase Carlisle Airport will enhance the development of our existing operations and provide additional growth opportunities.”
The Group proposes to raise approximately £75 million by means of a placing and open offer of 57.67 million ordinary Shares at 130 pence a share. The net proceeds of this fundraising will be used to finance the proposed acquisitions (cash and loan note elements).
As a result of the proposed acquisitions, the enlarged Group will bring financial, operational and environmental benefits for its customers and more opportunities for employees. The acquisition has the support of Stobart Group’s board and its major institutional shareholders. The enlarged company will have net assets of over £320m and employ more than 3,500 people across the UK.
The Group will have an established portfolio of long-term, big-brand customers, including Tesco, Coca-Cola, Proctor & Gamble and Johnson & Johnson.
WA Developments is owned by Andrew Tinkler and William Stobart, Chief Executive Officer and Chief Operating Officer respectively of Eddie Stobart. Carlisle Airport’s ultimate parent company is WA Developments International Limited, a company under the control of Andrew Tinkler and William Stobart. For these reasons, the Carlisle Airport and WA Developments acquisitions are related party transactions and are conditional upon shareholder approval at the EGM on 3 April 2008.
-Ends-