South African freight logistics firm Super Group is buying a 75% majority stake in leading German time-critical delivery company IN tIME from investor Equistone for €153.5 million to move into the European CEP market.
The B2B direct express delivery company generates the bulk of its revenues from the automotive sector and in its home market but also operates in several other European countries and targets sectors such as logistics suppliers and manufacturers. Key customers include VW, BMW and Daimler while logistics customers include DHL, DB Schenker, Hellmann, Hermes, TNT and UPS.
Overall, IN tIME, with 20 operating branches across Germany, Sweden, Hungary, Romania, the Czech Republic and Poland, operates in the niche logistics sector of time-critical delivery services, across 18 countries in Europe, servicing the automotive, electronics, hazardous goods, life sciences, pharmaceutical, temperature controlled, emergency blood and medical service industries. IN tIME has developed proprietary dispatching software which optimises transport capacity utilisation in order to provide point-to-point services.
Equistone took a majority stake in IN tIME following a secondary buyout in September 2011. Since then, its annual turnover has increased from €105 million (2010) with approximately 400 employees to €140 million in 2014 with approximately 550 employees. The German company has an EBITDA margin of 12.7%, according to a Super Group presentation to investors.
Super Group is a broad-based transport and supply chain logistics group with operations in South Africa, diverse African countries, Australia, New Zealand and the UK. In the year ending June 2014, it made an operating profit of R 1.3 billion on revenues of R 14.3 billion.
Peter Mountford, CEO of Super Group, commented: “The acquisition provides an excellent fit and falls directly within the core strategy to expand the Group’s Supply Chain activities in industry niches where we have extensive experience such as the automotive and industrial parts industries. The acquisition further expands Super Group’s geographical footprint and gives us access to the state-of-the-art proprietary dispatching software developed by IN tIME.”
Michael H. Bork, Managing Director, Equistone, commented: “Since acquiring IN tIME we have invested in positioning the business for future growth, for example by strengthening the organisational structure of the company, the expansion of the decentralised branch network, and through the acquisition of LTE Transport GmbH. By entering the express air cargo business, creating an internet sales platform and through a SME-client initiative we were able to further expand the strong market position of IN tIME and its product offering.”
“Equistone provided the impetus for our growth and helped set the course for the future,” said Torsten Prelle, Director of IN tIME. “With Equistone’s help we have gained a broader positioning, not least through the expansion of the branch network and our base of subcontractors. On behalf of our whole team I would like to thank Equistone for what has been a successful collaboration,” added Gerd Röttger, Director of IN tIME.
Outlining the deal, Super Group said it will acquire the 75% interest in Telo Zwei Vermögensverwaltung GmbH (“Telo Zwei”), the holding company owning 100% of IN tIME Holding GmbH (“IN tIME”), from certain funds managed by Equistone Partners Europe Limited for a total enterprise valuation of €153.5 million (R2.1 billion). The remaining 25% in Telo Zwei will continued to be held by the management team of IN tIME.
Financially, the acquisition of IN tIME is a reasonable 8.7 times EBITDA multiple, based on the actual earnings of IN tIME for the year ended 31 December 2014. The effective return on equity, including shareholder loans, is 11.9%, based on a historical Price Earnings multiple of 8.4 times, according to Super Group.
Mountford concluded: “We are confident that the acquisition of the 75% interest in IN tIME heralds an exciting phase in Super Group’s journey and we believe that the management team of IN tIME, with their extensive knowledge and experience, will be able to add extensive value to our Supply Chain Division. We are expecting this acquisition to be earnings enhancing for the financial year ending 30 June 2016.”
