U.S. private equity firm Wind Point Partners has sold the Canadian unit of Dicom Transportation Group, a Montréal-based expedited transportation and logistics services provider, to Royal Mail plc.
Wind Point sold Dicom Canada to General Logistics Systems BV, the international arm of U.K.-based Royal Mail, for $360 million.
Dicom Canada provides ground-based parcel, freight and logistics services in Canada with a focus on Ontario and Québec. Wind Point, which in 2014 partnered with CEO Scott Dobak to buy Dicom Transportation Group, said it will continue to own the company’s U.S. affiliate.
In a separate statement, Royal Mail, a provider of postal and delivery services, said the deal will help it “capture higher growth segments outside Europe.”
Dicom Canada will continue to be run by President Rick Barnes together with the existing management team, Royal Mail said.
Wind Point Partners Announces Sale of Dicom Canada to General Logistics Systems (GLS), a Division of Royal Mail
Chicago, IL, September 4, 2018 – Wind Point Partners, a leading Chicago-based private equity firm, announced today that its portfolio company Dicom Transportation Group has sold its Canadian subsidiary (“Dicom Canada”) to General Logistics Systems B.V. (“GLS”), a subsidiary of Royal Mail plc (RMG.L). Total consideration for Dicom Canada totals CAD $360 million.
Dicom Canada is a leading regional transportation company providing ground-based parcel, freight and logistics services in Canada with a focus on Ontario and Quebec. Wind Point partnered with CEO Scott Dobak to acquire Dicom Canada in February 2014 from founder and majority-owner Peter Overing, who led the business for over 40 years and positioned the company as one of Canada’s leading providers of expedited transportation services. Upon acquiring the business, Scott and Wind Point implemented a robust value creation plan that significantly expanded Dicom’s scale, diversified its customer base, expanded operating margins, professionalized its infrastructure, and achieved a compound annual EBITDA growth rate of over 15%.
Following the transaction, Wind Point and fellow shareholders will retain their ownership of Dicom Transportation Group’s U.S. subsidiary (“Dicom USA”), which was formed through multiple acquisitions as a sister company to Dicom Canada. Dicom USA generates approximately $150 million in annualized sales and stands as one of the leading providers of expedited final mile and distribution services in the U.S. Scott Dobak will remain with Dicom USA and will continue to lead the business.
Konrad Salaber, Managing Director at Wind Point, commented, “Dicom is a great example of how Wind Point’s focus on partnering with a top caliber CEO and building a world-class management team can drive tremendous value for our investors. The sale of Dicom Canada will deliver an excellent return to our investors and management, and we look forward to working with Scott and the Dicom USA team to build even further on our success to date.”
“Since our initial acquisition we have created significant value at Dicom by investing in the business, nurturing its culture, and executing the aggressive value creation plan that we created with Wind Point at the very launch of the platform,” said Scott Dobak, CEO of Dicom. “Wind Point and our board have always been dedicated partners to me and management, and we continue to value the integrity, guidance, and support they have provided from the outset of our partnership.”
Harris Williams served as exclusive financial advisor to Dicom Transportation Group. Kirkland & Ellis LLP served as legal advisor and KPMG LLP provided transaction advisory services to Dicom.
About Wind Point Partners
Wind Point Partners is a leading Chicago-based private equity investment firm with approximately $2 billion in assets under management. Wind Point focuses on partnering with top caliber management teams to acquire well-positioned middle market businesses where it can establish a clear path to value creation. The firm targets investments in the consumer products, industrial products, and business services sectors. Wind Point is currently investing out of Wind Point Partners VIII, a $985 million fund that was initiated in 2016.
Additional information about Wind Point is available at www.windpointpartners.com.
About Dicom Transportation Group
Dicom Transportation Group is an expedited transportation and logistics company. Through its divisions Dicom Canada and Dicom USA, Dicom provides overnight transportation, same-day delivery, final mile distribution, and transportation management services for parcel, less-than-truckload and full truckload shipments. Dicom operates one of the largest regional ground transportation systems in North America, managing a network of approximately 2,000 delivery vehicles and 55 facilities.
Additional information about Dicom is available at www.dicom.com.
About GLS Group
GLS, General Logistics Systems B.V. (headquartered in Amsterdam), provides reliable, high-quality deferred parcel services for over 270,000 customers, complemented by logistics and express services. Through wholly owned and partner companies, the Group provides a network coverage of 41 European countries and nation states and eight U.S. states and is globally connected via contractual agreements. Over 70 central and regional transshipment points and more than 1,000 depots are at GLS’ disposal. With its ground-based network, GLS is one of the leading parcel service providers in Europe. In the financial year 2017-18 GLS achieved revenue of £2.56 billion, and accounted for 33 per cent of Royal Mail plc’s adjusted operating profit after transformation costs, up from 29 per cent in the financial year 2016-17.
About Royal Mail Group
Royal Mail plc is the parent company of Royal Mail Group Limited, the leading provider of postal and delivery services in the UK and the UK’s designated universal postal service provider. UK Parcels, International & Letters (UKPIL) comprises the company’s UK and international parcels and letters delivery businesses operating under the “Royal Mail” and “Parcelforce Worldwide” brands. Through the Royal Mail Core Network, the company delivers a range of parcels and letters products, including the one-price-goes-anywhere Universal Service products. Royal Mail has the capability to deliver to more than 30 million addresses in the UK, six days a week (excluding UK public holidays). Parcelforce Worldwide operates a separate UK network which collects and delivers express parcels. Royal Mail also owns General Logistics Systems (GLS) which covers 41 countries and nation states in Europe and eight states in the Western U.S. GLS operates one of the largest ground-based, deferred parcel delivery networks in Europe.
Ron Liberman, Wind Point Partners