NFC sells home moving arm to rival for $450m
The $450m deal with New York-based Clayton, Dubilier & Rice will create the world's largest moving-service firm with turnover of more than $2bn and operations in 36 countries, NFC said. The transaction, which has been expected for some months, will be subject to regulatory approval in the US, where the two firms dominate the market.
NFC said it expected to finalise the move before the end of the year, but admitted regulatory hitches were possible.
Privately-held Clayton, Dubilier & Rice, which owns house-mover North American Van Lines, will pay $400m in cash for Allied Pickfords, plus $25m in preferred stock.
NFC will retain a 20 per cent stake in the combined business, which it said it will regard as an investment. It also holds a warrant to subscribe for a further 10 per cent equity interest in the company.
The deal leaves NFC to promote its Exel Logistics business, which provides retail and manufacturing customers with logistics services worldwide.
Gerry Murphy, NFC chief executive, said: "Exel Logistics will benefit from our total focus on the global supply chain service market and from the financial resources released by the sale of Allied Pickfords."
Mr Murphy added: "Exel Logistics is already well positioned for growth arising from the continued outsourcing and globalisation of the supply chain, and from e-commerce."
NFC, which was privatised in the 1980s and formerly known as the National Freight Corporation, said that it would also consider returning some cash to shareholders.
In the year to last September, Allied Pickfords made operating profit before exceptionals of pounds 31.1m on turnover of pounds 698.3m. NFC estimated the book gain from the disposal, after goodwill, investment in the business, tax and transaction costs, at about pounds 90m.
Analysts responded positively to the news "The sale was expected," one said. "They managed to get a good price."
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