Dutch postal group PostNL is set to exit the British postal market under a deal for a management takeover of its UK subsidiary Whistl.
The news follows Whistl’s exit from the final-mile delivery business in June and refocusing on its core activities of mail collection and sorting, with Royal Mail providing the actual delivery under a downstream access contract.
PostNL announced today that it has reached agreement with Whistl’s management on the main conditions of a management buyout after a strategic review concluded that an MBO “is in the best interest of all stakeholders”.
“This transaction will allow Whistl to develop its current profitable activities and strengthen its position in the UK,” PostNL stated.
As part of the transaction, PostNL will retain 17.5% of the shares in Whistl and will continue supporting the business as a shareholder. The transaction is expected to negatively impact PostNL’s consolidated equity by between €20 and €25 million.
The transaction is expected to close later this year. The finalisation is subject to a number of conditions, including the financing of the management buyout.
Nick Wells, CEO Whistl, said: “Through a management led company, Whistl will continue to build upon its entrepreneurial heritage. We will continue to challenge, innovate and provide great service to customers, whilst retaining the support of PostNL.”
Following this transaction Whistl said it will be able to develop its current portfolio of activities and build its leading position in the UK postal market.
Whistl is the second largest postal operator in the UK. Its core downstream access (DSA) business has over 56% market share in the UK handling around 3.75 billion items of mail, alongside an established Door Drop Media division. In addition there are growing Packets and Parcels and Logistics divisions.
In 2014, Whistl increased its revenues by 3.2% to €753 million but its profitability was impacted by start-up losses related to the end-to-end services.
