The distribution arm of Scottish logistics giant John Menzies said yesterday it had snapped up an Inverness-based parcel delivery company in a deal worth £7.5million.
Menzies Distribution, whose activities involve night-time newspaper and magazine deliveries, said the acquisition of AJG Parcels was aimed at helping the company break into the e-commerce parcel market.
The division wants to keep its fleet ticking over with parcel deliveries during the day, mainly focusing on the hard-to-reach areas that make up AJG’s client base.
AJG has a network of 13 depots, 140 staff members and more than 100 vehicles, allowing it to providing a next-day service to customers across the Highlands and islands.
It used to deliver 20 parcels a day when it was set up two decades ago, but has since expanded into a business that makes 9,000 drops and 800 pick-ups daily.
Menzies Distribution managing director Forsyth Black said: “The purchase of AJG is an important step in our ongoing journey to build on our newspaper and magazine distribution business.
“It is especially significant because it allows us to participate in the fast-growing market of parcel delivery and collection.
“With our existing geographical reach, especially in harder-to-access towns, the acquisition further underlines our appeal to companies seeking cost-efficient deliveries to the north and rural west of Scotland.
“We believe that, by acting as a neutral consolidator in these areas, we can offer a compelling partnership proposition to the UK’s major parcel carriers.”
Jeremy Stafford, chief executive of parent company John Menzies, said: “We are delighted to diversify into the growing e-commerce parcel market. This acquisition allows us to collaborate with the national carriers and use our existing footprint to act as a cost-effective neutral delivery and collection agent.
“Leading on from this acquisition, I look forward to sharing our wider strategy for our distribution business at the time of our interim results in August.”
At John Menzies’ annual general meeting last month, between 13% and 21% of shareholder votes opposed the re-election of its board members amid reports that the company had come under pressure from an activist shareholder that wanted to split up its aviation services and newspaper distribution businesses to maximise the their value.
In March, the Edinburgh-based group recorded a 40% drop in its profits for 2014, largely due to “operational issues” at its aviation division.