Durham’s Hargreaves sells tanker subsidiary for £26.9 million

Durham-based Hargreaves Services plc, a supplier of solid fuels and bulk material logistics, has announced the disposal of Imperial Tankers for £26.9 million.

The group’s wholly owned subsidiary, Imperial Tankers Limited was sold to Suttons Transport Group.

This disposal is a ‘first step’ in a new strategy by the group to simplify operations and ensure the business is optimally placed to respond to changes in market conditions.

Imperial has been part of the Group since it was acquired in 2007 for a total consideration of £6.3 million.

The tanker operation has grown steadily under the Group’s ownership and has been consistently profitable. However it currently offers “limited synergies” with other Group operations and now falls outside the Group’s core activities.

Imperial generated profit after tax of approximately £1.6 million on revenue of £29.7 million during the year ended 31 May 2014. EBITDA in the year ending 31 May 2014 was approximately £4 million.

The book value of Imperial Tankers in the Group accounts was approximately £9.5 million.

Gordon Banham, CEO of Hargreaves, said: “Imperial Tankers is a quality business and I would like to commend and thank the staff and management for their hard work and commitment in developing Imperial into one of the strongest tanker brands in the country.

“The very favourable valuation reflects the quality of the business and strong recent growth.

“I am pleased that the business has been sold to a high calibre operator who is seeking to invest in expansion and is well placed to drive synergies from the business, which the Hargreaves Group is unable to access.

“This is a good outcome both for the Group and for the management and employees of Imperial Tankers. Following the disposal we will be left with the fleet of dry bulk vehicles.

“This will remain a key part of the Group to drive synergies with our trading and production activities.”