Corporate News

LDC exits TPN in £52.8m sale to Eddie Stobart Logistics plc

Leading mid-market private equity investor LDC has reached an agreement to sell The Pallet Network (“TPN” or “the business”), the UK’s leading provider of pallet distribution services, to AIM-listed Eddie Stobart Logistics plc, a leading UK supply chain, transport and logistics group. The deal values the business at £52.8m.

Founded in 2000 and headquartered in Minworth, Sutton Coldfield, TPN operates the UK’s second largest pallet network, comprising 106 regional hauliers. It has three central hubs that distribute to 121 distribution sites across the UK.

LDC backed the original management buyout of TPN in 2007 before reinvesting in the business in 2016.

Since the original investment, the business has grown significantly, more than trebling revenues from £34.7m in 2007 to £119.5m as at March 2017. During this period, TPN opened a new purpose-built, 367,500 sq ft hub in January 2014, added regional hubs near Preston in 2015 and in Brackmills, Northampton earlier this year.

TPN also acquired a long-standing member of its network, Eezehaul. Since 2007, annual pallet volumes have increased to 3.9m and the business now has the capacity to deliver up to approximately 21,000 pallets every day.

The transaction, which was led by LDC investment directors Rob Schofield and Victoria Marcer, generates strong returns since LDC’s original investment back in 2007.

The deal with Eddie Stobart sees the business join a leading UK supply chain, transport and logistics group. The business is listed on the London Stock Exchange’s Alternative Investment Market (AIM) and operates across a broad array of core sectors including e-commerce, manufacturing, industrial & bulk, retail and consumer, from its headquarters in Warrington.

TPN Chief Executive Mark Duggan said: “We’d like to thank LDC for its support over the last 10 years on what has been an incredible growth journey that has seen our business grow from strength to strength, enabling us to develop into a leading pallet distribution business that we are today.

’We were very pleased to be approached by Eddie Stobart, which has extensive experience within the logistics industry and the team have built a market leading end-to-end supply chain business, across the UK and in Europe. Most importantly for us, is that they have 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.”

Commenting on the exit, LDC investment director Rob Schofield said: “During our 10-year partnership with TPN, we have worked with the team to build significant, long-lasting value which has largely been achieved through organic growth. TPN is now the UK’s second largest pallet network, with the operational capabilities, resource and expertise to continue to drive the business forward.

“Becoming part of the Eddie Stobart family, which has an unrivalled network of distribution centres and vehicles across the UK and Europe, is a perfect fit for the business as it looks to continue on its growth journey. We wish Mark and his team every success moving forward.”

The deal was completed with support from a number of regional advisors, including Brown Jacobson (Birmingham), EMW Law and BDO (Birmingham).

The sale of TPN marks a busy few months for LDC’s team in the Midlands, following the exit of Validus-IVC to US data analytics provider Verisk, the £22.5m management buyout of Precision Micro Limited from Meggitt plc and a £13m investment in the management buyout of Asset Solutions Group from international facilities management services company, OCS Group Ltd.

Article Footnotes

Notes to Editors

  1. LDC is part of the Lloyds Banking Group and is authorised and regulated by the Financial Conduct Authority
  2. LDC back ambitious management teams from UK-based companies seeking between £2m and £100m of equity for management buy-outs, institutional buy-outs or development capital transactions.
  3. LDC invests in a broad range of sectors and has particular experience in Construction & Property, Financial Services, Healthcare, Industrials, Retail & Consumer, TMT, Travel & Leisure and Support Services.
  4. LDC has a UK regional network of 9 offices.