Two senior parcel executives are taking over at DX Group, the UK mail and courier company, aspart of a management buy-in and a £15 million (€17 million) equity injection by the main
shareholder, a private equity company.Petar Cvetkovic and David Hoare, the former CEO and the former chairman of parcels companyTarget Express, will become CEO and chairman respectively, DX Group announced yesterday. As part ofthe deal, the main shareholder, the private equity house Candover Partners Limited, as manager ofthe Candover 2005 Fund, is to inject fresh equity of £15 million.
According to the Daily Telegraph newspaper, Candover has been forced to hand over 49% of DXshares to the company’s lenders in exchange for £30 million (€34 million) of debt. Talks to sellthe company have been held in the past with TNT, DHL and FedEx, according to the newspaper.
The current DX Group chairman, David Mitchell, handed over the reins to David Hoare yesterday.The present CEO, John Coghlan, will resume his previous position of Non-Executive Director and handover to Petar Cvetkovic.
The two executives successfully and profitably grew Target Express into an industry leadingcarrier before it was sold to City Link in 2006. Cvetkovic, who has 27 years of experience in theBritish express, freight and logistics industry, stayed with the company and became managingdirector of City Link before leaving last September.
“Petar and David bring to the management team a huge amount of experience and we are delightedto welcome them to the DX Group board,” Coghlan said. “DX Group has weathered an unprecedentedlytough trading period over the last 18 months, but has remained profitable and cash-generative. Now,with the support of Candover and our banking group, we have a strengthened balance sheet and thefreedom to push ahead.”
Cvetkovic said: “David and I are very pleased to join the DX Group, a company which we’veconsistently held in high regard. The business has a solid, profitable base and, in the comingmonths and years, we will seek to build upon its strong reputation in the market place.”
Mark Dickinson, director of Candover, added: “We are extremely grateful to David Mitchell, JohnCoghlan and their team for steering DX through a very difficult economic period and maintainingboth market share and profitability. The refinancing is a very positive outcome for both DX Groupand Candover, and we’re delighted to back the management with further fresh capital. In welcomingDavid and Petar to the board, DX is now well placed to exploit the long term opportunities presentin this sector.”
DX Group, created by the legal sector in the 1970s as an exclusive document exchange service,has expanded in recent years following liberalisation of the British postal industry. It operatesthe only nationwide final-mile delivery network in competition to Royal Mail, and offers a range ofnext-day mail, parcel and courier delivery services to businesses and consumers.
In the year ending June 30, 2008, DX Group increased turnover to £173.6 million, with about halfof revenues generated by the Document Exchange service and the remainder by direct to door andsecure mail deliveries. The company made an underlying operating profit of £41.1 million andreported an operating profit of £13.2 million. Including financial charges, however, it made a netloss of £39.8 million.
Results for the year ending June 30, 2009, have not yet been announced. According to the DailyTelegraph, however, DX Group had operating profits (EBITDA) of just under £40 million.
