British ground handling and cargo services group John Menzies plc is moving into the e-commerce logistics business with the acquisition of Scottish delivery firm AJG Parcels.
Its logistics unit, Menzies Distribution, has bought the Inverness-based company for £7.5 million in cash. AJG, with two regional hubs and a fleet of 100 trucks, delivers some three million parcels a year in the remote Scottish Highlands and Islands regions as a neutral final-mile delivery partner for major parcel carriers.
Menzies Distribution, which describes itself as “one of the largest overnight logistics networks in the UK” with eight hubs and 31 regional centres and a fleet of 1,900 trucks, currently delivers about 110 million items a year on behalf of customers in the media, travel and third-party logistics sectors. The bulk of this business is overnight delivery of newspapers and magazines to retail outlets.
Jeremy Stafford, Chief Executive of John Menzies plc said: “We are delighted to diversify into the growing e-commerce parcel market. This acquisition allows us to collaborate with the national carriers and use our existing footprint, in the more hard-to-reach territories, to act as a cost effective neutral delivery and collection agent.”
In particular, the acquisition of AJG Parcels forms “an important step in realising the potential of our Distribution business, as we seek to participate in the growing e-commerce parcel market by better utilising our asset base during daylight hours”, the group explained. The acquisition “offers opportunities to scale the business across our wider network”.
Looking ahead, Stafford added: “Leading on from this acquisition I look forward to sharing our wider strategy for our Distribution business at the time of our interim results in August.”
Forsyth Black, Managing Director of Menzies Distribution, added: “The purchase of AJG is an important step in our ongoing journey to build on our newspaper and magazine distribution business. It is especially significant because it allows us to participate in the fast-growing market of parcel delivery and collection. With our existing geographical reach, especially in harder to access towns, the acquisition further underlines our appeal to companies seeking cost-efficient deliveries to the North and rural West of Scotland. We believe that, by acting as a neutral consolidator in these areas, we can offer a compelling partnership proposition to the UK’s major parcel carriers.”
John Menzies, best known in the UK for its former newsagents chain, has transformed into a diversified services group in recent years. Its ground handling business operates at 143 airports worldwide, the cargo handling business operates at a number of airports, and the neutral freight consolidator AMI buys bellyspace capacity on passenger flights and consolidates freight shipments on behalf of freight forwarders and courier companies.
