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Distribution company completes big-money acquisition

Category: Scotland Business News — Gary Cain on December 2, 2012

John Menzies, the Edinburgh-based aviation and distribution company has announced that it has agreed the £13m acquisition of Kent-based logistics firm, Orbal Marketing Services Group.

The reason for the move is to grow the business, with the firm’s chairman, Iain Napier, saying:

“This acquisition allows us to expand our printed media distribution footprint whilst also taking a large stride into adjacent growth areas.”

There are an increasing number of acquisitions and mergers in the UK, with many companies using factoring facilities to help with funding. Conversely, other companies are looking to ward off an acquisition through invoice factoring or discounting.

The acquisition will see the Edinburgh company pay £7.7m up front, followed by a further £5.9m through the course of the next two years.

A further £6.3m could be payable should the group achieve “exceptionally high” profits by the end of 2014. This would bring the total deal to just short of £20m.

Though the deal will see the Scottish group extend its print distribution operations, it will also open up new markets. Presently, Orbital’s portfolio also consists of logistics and marketing services across sectors such as charity, education, tourism and travel.

These new avenues will be integrated with Menzies’ present operations, with Iain Napier saying:

“The team are now focused on integrating these new businesses and driving through the significant synergies that have been identified.”

Whether any of the 550 plus staff at Orbital will be made redundant by the move is, as yet, unclear.

'Disclaimer: The information contained in these articles is of a general nature and no assurance of accuracy can be given. It is not a substitute for specific professional advice in your own circumstances. No action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a consequence of the material can be accepted by the authors or the firm.

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