The international arm of Britain’s Royal Mail Plc has bought Canadian parcel delivery company Dicom Canada for $360 million (£214 million), adding to its growing operations in a number of U.S. states and across Europe.
The acquisition from Chicago-based private equity firm Wind Point Partners comes as Royal Mail aims to boost revenue share from outside the United Kingdom through its international unit, General Logistics Systems (GLS).
“This acquisition is in line with GLS’ strategy to grow through targeted and focussed acquisitions to capture higher growth segments outside Europe,” said Royal Mail Chief Executive Officer Rico Back, who until April served as the head of GLS.
GLS accounted for 33 percent of the Royal Mail’s 2017-18 adjusted operating profit after transformation costs, up from 29 percent a year earlier, the company said.
The deal, which takes Royal Mail into Canada, was funded through existing borrowing facilities and will be earnings and cash flow accretive in the financial year ending March 31, 2019, the company said.
Dicom Canada, which offers ground-based parcel, freight and logistics services, operates a network of 28 depots and works with partners to provide pan-Canadian logistics services, Royal Mail said, adding the Montréal-based company had posted good revenue and profit growth in recent years.
Update: Wind Point acquired Dicom Transportation Group in 2014 from founder and majority owner Peter Overing. The investor partnered in the deal with CEO Scott Dobak.
In a statement, Wind Point said it would continue to own Dicom USA, the company’s U.S. affiliate.
(Reporting by Justin George Varghese in Bengaluru; Editing by Amrutha Gayathri)