Sale of a Road Haulage and Distribution Company
Our record for completing successful business sales is often driven by our trusted relationships with our client’s accountants, coupled with our ability to target industry-specific trade buyers. These two key factors were pivotal in a mandate we received in early 2022, with the resultant sale achieved within an impressively smooth and swift timescale.
We received the mandate to sell JM Distribution Services (Midlands) Ltd (JMDS), a road haulage company founded in 2012 following an introduction by the company’s longstanding accountant. We were subsequently appointed by JMDS having prepared a free initial valuation.
JMDS benefitted from a steady trading background demonstrated by a consistent record for profitability. The business began trading with one unit and a trailer and had progressed over a 10-year period to a fleet of high specification trailers, with the ability to transport products across the UK on a 24/7/365 basis.
The company operated with a lean structure, with the sole Director managing an experienced team of 10 HGV drivers. This simple structure afforded ample opportunity for growth for buyers through building the administrative and sales capacity of the company. The company was also an ideal bolt-on business for a larger haulage operator.
The Situation
The key challenge with this project was the reliance on the founding owner who managed many key operational logistic aspects of the business singlehandedly. However, this made the business ideally suited to a trade buyer with the appropriate logistics managers in place who could take on the additional workload of the business.
The marketing phase of JMDS attracted healthy levels of attention from highly focused potential buyers. Throughout this period, we received forty-eight expressions of interest, and had discussions with numerous qualified and funded buyers.
This process quickly led to the emergence of several serious potential buyers with whom we and our clients were able to negotiate and select the preferred bidder.
The Outcome
JMDS first went on the market with Hornblower in March 2022 and reached Heads of Terms by the end of April 2022 – resulting in the process taking place over a rapid if not record 5-week timescale.
The eventual buyer was Freight24, a logistics group with a growing portfolio of UK-based commercial vehicle service companies and hauliers across the Midlands and East Anglia.
As with many deals, there were many detailed aspects to be agreed and negotiated through due diligence and the drawing up of contracts, which is an area we pride ourselves on in managing transactions to a successful conclusion. The deal completed in July 2022 - well within the 3 months we expect for this stage of the sales process. The vendors were also advised by Cook Corporate, who managed the legal aspects of the sale.
We were able to negotiate a deal which worked well for both sides, and the result is a secure financial future for the vendor of JMDS, enabling him to step off the treadmill and a valuable cash generating addition for the Freight24 Group.
The deal was managed by our Business Sales and Acquisitions Consultant, Sian Murray. Sian manages business sales for Hornblower across the UK.
SOLD – July 2022
