Business

Royal Mail buys into Canada with C$360 million courier deal

(Reuters) – The worldwide arm of Britain’s Royal Mail Plc (RMG.L) has purchased Canadian parcel supply company Dicom Canada for C$360 million (£214 million), including to its rising operations in numerous U.S. states and throughout Europe.

Royal Mail vans are parked within the Leytonstone submit workplace depot in London, Britain early July 6, 2017. REUTERS/Russell Boyce

The acquisition from Chicago-based non-public fairness agency Wind Point Partners comes as Royal Mail goals to spice up income share from outdoors the UK via its worldwide unit, General Logistics Systems (GLS).

“This acquisition is in line with GLS’ strategy to grow through targeted and focussed acquisitions to capture higher growth segments outside Europe,” mentioned Royal Mail Chief Executive Officer Rico Back, who till April served as the top of GLS.

GLS accounted for 33 % of the Royal Mail’s 2017-18 adjusted working revenue after transformation prices, up from 29 % a yr earlier, the company mentioned.

The deal, which takes Royal Mail into Canada, was funded via current borrowing services and shall be earnings and money circulation accretive within the monetary yr ending March 31, 2019, the company mentioned.

Dicom Canada, which affords ground-based parcel, freight and logistics companies, operates a community of 28 depots and works with companions to supply pan-Canadian logistics companies, Royal Mail mentioned, including the Montreal-based company had posted good income and revenue progress in recent times.

Reporting by Justin George Varghese in Bengaluru; Editing by Amrutha Gayathri

Our Standards:The Thomson Reuters Trust Principles.

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