The new £14 million term loan with Royal Bank of Scotland marks the fifth announcement of “strategic importance” made by the firm in recent months.
In December, the Edinburgh-headquartered group acquired Bibby Distribution from the 213-year-old, family-owned Bibby Line Group in a “transformational” takeover adding hundreds of staff and vehicles.
The new loan, together with existing cash funds, has enabled Menzies to refinance its recent short-term debt used to fund the acquisition of Bibby Distribution, now Menzies Distribution Solutions. The new funding will also provide additional fire-power to support the future growth of the business.
In January of this year, former Asda chief executive Andy Clark was appointed as non-executive chairman. In May, former Booker boss Charles Wilson joined the group as a non-executive director and new significant investor.
Earlier this month, Menzies acquired JBT Distribution, a logistics and supply chain services business with strong representation north of the Border.
Paul McCourt, chief financial officer at Menzies Distribution, said: “This strategic refinancing is an important step in creating a strong and cost-effective capital structure, ready to support the exciting growth and investment opportunities across all our businesses.
“It will further strengthen our balance sheet and significantly increase our flexibility in pursuing organic growth and selective bolt-on acquisitions which align with our strategy.”
The firm operates from more than 100 sites across the UK and Ireland, distributing newspapers and magazines, retail stock, healthcare products and parcels to more than 30,000 locations each day. Employing almost 5,000 people and operating with some 4,200 vehicles, the group has an annual turnover in excess of £1.2 billion.
The distribution business had been part of John Menzies – one of Scotland’s longest established companies, dating back to 1833. In September 2018, private equity group Endless LLP acquired Menzies Distribution leaving John Menzies to focus on providing global aviation services.
Aidan Robson, partner at Endless LLP, said: “We are very pleased with the significant progress made by the business in the last 12 months. The business has delivered strong results as well as completing two strategic acquisitions.
“This refinancing is testament to management’s ongoing successful strategy and the confidence of a major external lender in the exciting prospects for Menzies.”
David Amos, Royal Bank of Scotland’s head of UK financing solutions (North & Scotland), added: “This is a high-quality business with a first-class management team, highly supportive shareholders, consistently strong financial performance and a clear strategy for continued growth and diversification.
“It is a pleasure to work with Paul McCourt and all the team at Menzies, and we look forward to continuing our partnership on future projects.”
Last year, Menzies Distribution said it was expanding its zero-emissions delivery fleet to Scotland, as it accelerates towards using renewable energy across its entire operation. The firm said the new vans were based in Oban and were the first electric vehicles to be based in its Scottish network.