Logistics sector: On the road to growth

By Ged Henderson

16 Jun 2022

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Lancashire’s logistics sector has witnessed a series of deals in recent weeks as a number of players look to drive forward operations and expand their horizons.

As the sector looks to emerge from the challenges of the pandemic and Brexit, industry watchers are predicting more businesses will look to take the route to growth and diversification through acquisition.

M&A activity has been rising for some time. A report by accountancy firm BDO revealed that the annual volume of completed logistics and supply chain deals in 2021 hit a record high - with an overall disclosed value of £2.7bn.

WH Bowker is one of those businesses that has looked to strengthen its business through acquisition and with further growth firmly in its sights.

The Bamber Bridge based company is already one of the UK largest private operators, specialising in chemical, pharmaceutical, and food grade logistics.

It has acquired two operations in Greater Manchester for an undisclosed sum. The deal for Rochdale firms James Nuttal (Transport) and Queensway Commercials adds 48 vehicles to its commercial fleet.

And it also expands its infrastructure in the form of Queensway’s DVSA authorised testing facility, which carries out MOTs and tachograph repairs.

Bill Bowker, director of the family run firm, which has been in business for more than a century, says the opportunity for growth played a major part in the deal.

He says: “It is a successful family-owned business and shares the same cultural ethos as our own.

“We are extremely confident the venture will strengthen our UK and European warehouse and distribution business, providing further opportunities.”

The acquisition means that Bowker’s UK and European fleet now numbers more than 225 vehicles and 450 trailers. The business also has 1.2 million sq ft of warehousing across 10 strategically placed locations across the UK.

Could there be more acquisitions further down the road? Bill says: “We continue to examine all options which meet our business strategy. Any future acquisition will continue to meet all our criteria and will add value to our overall business.”

Looking at the wider industry, he says: “Within the industry there is huge demand for new equipment, in many case logistics operators face lengthy lead times from vehicle manufacturers due to delays within supply chains. In some scenarios, obtaining additional equipment by acquisition is a viable option to consider.”

He adds: “Over the last two years, manufacturers’ supply chains have been under pressure. After challenging trading periods there tends to be an element of consolidation and the logistics sector is no different.

“We have seen several large multinational operators merge or acquire other large operators. Clearly there is an appetite from investors to strengthen their position in the sector, growing by strategic acquisition, expanding both warehousing and vehicle capacity.”

Altham based North West Logistics has also hit the acquisition trail, with the support of a sevenfigure funding package from HSBC UK.

With more than 60 vehicles in operation, supported by 100,000 sq ft of warehousing space, the business has customers across the UK, ranging from SMEs to large multi-nationals.

It has now acquired Proserve Logistics, a Wrexham-based operation with more than 400,000 sq ft of warehousing space, supported by a fleet of 15 vehicles.

North West Logistics says the deal, again for an undisclosed sum, will strengthen its operations and expand its geographical presence in North Wales and the surrounding regions.

As a result of the deal, and the inclusion of an expanded customer base, the combined revenue of the new group will increase to £17m, and over the next two to three years that figure is expected to increase further.

Stephen Dunn, managing director at North West Logistics, says it “marks an exciting next chapter for our company.”

He adds: “This acquisition allows us to join together with a well-established, reliable business, with a very experienced management team, robust growth plans and a loyal customer base.

“We’re well-positioned to seize further growth opportunities that focus on the highest quality logistical solutions for our customers, whilst enabling us to retain the strength of our existing processes and management team.”

Burnley-based EFS Global has been undertaking its buy to build strategy for some time now. Earlier this year it was predicted that the business would hit the £100m turnover mark, following two more acquisitions.

The deals, for undisclosed sums, saw the logistics firm acquire the entire issued share capitals of Gees Haulage of Wakefield and Tyneside Express Transport of Gateshead. The aim of the move is to add value and reach.

Both companies provide a comprehensive range of haulage, distribution and warehousing services and the acquisitions have delivered 235 vehicles and 115,000 sq ft of warehousing space to the group.

Announcing the deals Mark Jones, managing director of EFS Global, described 2021 a period of “substantial growth” for the business and added that the latest acquisitions “mark significant steps in our ongoing growth strategy and will enhance our ability to service our clients around the country.”

It’s not just logistics businesses looking to expand their horizons through buy to build strategies. Blackpool-based Fox Group has continued its expansion journey with a deal that takes its haulage, earthwork and plant hire specialist operation nationwide.

It has completed the multi-million-pound acquisition of Cotswold Roller Hire (CRH), a major force in the hire of specialist compaction equipment across England and Wales.

Another step in the delivery of its strategic plan, the move strengthens Fox Group’s market position, with the addition of CRH’s extensive portfolio of plant, machinery, market knowledge and depots across the country.

Fox Group now operates from 18 locations, has a 270-wagon fleet, 1,800 items of plant and machinery and employs 620 people.

Chief executive Paul Fox says: “The acquisition of CRH adds a large number of plant items and specialised transport to our already substantial fleet of plant, tippers and bulk haulage.

“The geographical spread of CRH’s depot extends the reach of Fox Group, hugely increasing our footprint across the UK.”

Enjoyed this? Read more from Ged Henderson

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