Clipper Logistics completes £11.75m acquisition of Peterborough's Tesam Distribution

Clipper Logistics plc, the Leeds-based provider of value-added logistics solutions and e-fulfilment to the retail sector, has completed the acquisition of Tesam Distribution Ltd.

Tesam, which employs around 250 people, is a provider of a variety of warehousing and distribution services to the retail sector.

Established in 1984, the business operates from three sites in and around Peterborough totalling more than 1.1m square feet of space.

In the financial year ending on 30th June 2016, Tesam’s audited accounts reported revenue of £19.6m, earnings before tax and interest of £1.8m and net assets of £3.1m.

The consideration is being funded in cash from Clipper’s existing cash and bank facilities.

The gross consideration paid is £11.75m, however the assets being acquired include cash of approximately £3.4m and a freehold property which will be sold post-acquisition and is expected to realise £2.7m net.

Tesam was principally owned by managing director Stephen Smith, who will become a consultant to the Group following completion. The other members of the management team will remain as full time employees of the business.

Clipper plans to increase capacity at Tesam’s site at Ivatt Way through the installation of mezzanine floors and additional racking and handling capability.

The acquisition of Tesam is expected to be immediately earnings-enhancing to the Group.

Steve Parkin, executive chairman of Clipper, commented: “Tesam is a successful and robustly profitable and cash generative business which we have known for some time.

“The acquisition, coupled with our planned investment in additional capacity, will enable us to offer existing and prospective customers of both Clipper and Tesam greater operational flexibility, and will provide further headroom for the delivery of our strong business pipeline.

“We welcome the employees and management team to the Clipper Group and look forward to continuing to build the breadth and depth of our services and customer base.”