Xpediator gobbles up Benfleet Forwarding

Freight management services provider Xpediator announced on Friday it has acquired the UK-based international freight forwarder Benfleet Forwarding.

The AIM-traded company said the initial consideration payable on completion was £6.55m comprising £3.95m in cash and £2.6m in new Xpediator ordinary shares.

Further consideration of up to £3.9m in cash could also be payable contingent on the future results of Benfleet.

“We know the Benfleet business well and we are confident it will be a commercially valuable and accretive acquisition for us,” said Xpediator CEO Stephen Blyth.

“Benfleet shares our asset light approach to freight forwarding and will add significantly to our sea freight activities.”

Blyth said the Benfleet team were “well known and highly experienced”, and his company was “delighted” that Jason Herring - Benfleet's managing director - would continue to run the business.

“Our client bases are similar but do not have significant overlap and while our services our comparable our geographic focuses are different.

“There are therefore immediate opportunities to provide greater geographic coverage to both client bases and we have identified duplicated costs.”

Blyth added that Xpediator’s strategy is to grow not only organically, but also by acquiring smaller competing businesses which could enhance the group's earnings and its services to existing and new clients.

“This acquisition meets these criteria and we look forward to integrating Benfleet alongside our Delamode freight forwarding activities.”

The Xpediator board said Benfleet was a “complementary acquisition” with immediate cross-selling opportunities and potential cost synergies.

Benfleet generated revenue of £21.0m, operating profit of £1.73m and profit after tax of £1.35m during the year to 31 March 2017.

Net assets at year-end were £1.35m, and cash in the balance sheet at completion was approximately £2.47m.

Cash consideration would be funded from existing resources, Xpediator’s board confirmed.

Benfleet operates across Europe, with offices in Dover, Basildon and Chelmsford in the UK, Trento in Italy and Ploiesti in Romania.

It was described as an “asset-light operation”, providing freight forwarding services including road transport and ocean freight shipments.

On completion, the enlarged group will operate from five sites in the UK together with 11 offices in Europe, and employ more than 650 people.

The acquisition was expected to be immediately earnings-enhancing for Xpediator.

“As stated at the time of the Company's IPO in August this year, a key reason for Xpediator listing on AIM was to facilitate the company's mergers and acquisitions strategy in the highly-fragmented freight forwarding and logistics market,” the Xpediator board said in its statement.

“Benfleet was identified as an acquisition opportunity prior to the company's IPO given the natural fit between the two businesses offering attractive synergies and cross-selling opportunities.”