Xpediator (AIM:XPD ) has acquired the UK-based international groupage freight forwarder and operator, Nidd Transport Ltd ("Nidd") for a total consideration of £4.6m, to be satisfied from existing cash resources.
The group said it expects the acquisition of Nidd to be immediately earnings enhancing.
Yorkshire-based Nidd, which was first established in 1984, specialises in daily express deliveries to mainland Europe by road with a particular focus on France, Spain, Portugal and Germany, and provides a UK distribution platform particularly in the North of England.
Nidd generated revenue of £11m, operating profit of £0.5m and profit after tax of £0.4m during the year ended 30th April 2020 while its net assets in the period stood at £4.2m.
Xpediator, which provides freight management services across the UK as well as Central and Eastern European, said this morning’s complementary acquisition comes with ‘immediate cross-selling opportunities’ and is ‘a natural fit’ with the Company’s existing operations.
The group highlighted that Nidd’s current western European focus complements its focus on central and eastern Europe, Italy and Germany and provides opportunities ‘to cross sell its own services to Nidd's customer base and maximise carrying capacities to and from Europe.’
Shares in Xpediator responded positively to the news of the acquisition and are currently up 8.7% in early morning trading.
It said potential synergies of linking UK national service offering using Nidd's transport and distribution in the North would strengthen the Midlands and Southern regions.
While the business will operate under the Nidd brand, Xpediator said an integrated customs clearance service would differentiate Nidd's prospects during a potential hard Brexit.
Managing Director of Nidd, Tony White, intends to retire after a handover period. Nidd will be run by the current management team and expects to benefit as part of a larger group.
"We have known Nidd Transport for some time and its reputation for being an excellent regional freight forwarder,” said Robert Ross, Chief Executive of Xpediator.
He added, “Our aim is simply to continue to grow the company and we are confident we can do so. Our client bases are similar but do not have significant overlap and while our services are comparable our geographic focuses are different.
There are therefore immediate opportunities to provide greater geographic coverage to both client bases and we expect both existing client bases to benefit from the enhanced service offerings."
"It was important to me to find the right buyer for our Company and I believe we have done so, ensuring it's long term success with a bright future for the loyal team of colleagues that have supported me over the years,” commented Tony White, Managing Director of Nidd.
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