John Menzies has completed the disposal of Menzies Distribution, in what it described as a “landmark day” that marks its final departure from the print media sector.
The Edinburgh-based business is one of Scotland’s oldest companies and started as a print distribution business in 1833, selling The Scotsman from its shop on Edinburgh’s Princes Street.
It said in July that it had agreed to sell the distribution arm to private equity fund manager Endless LLP in a £74.5 million deal marking its exit from the market for print media and retail logistics to instead focus on global aviation services.
John Geddes, group company secretary and corporate affairs director, told The Scotsman: “If you look at it emotionally, it is very much a landmark day for the company.”
However, he also noted that it is another step in the long evolution of Menzies that has included its retail stories selling CDs and toys. “Things in life keep evolving so this is the next evolution of John Menzies,” added Geddes, who said it is “quite exciting” to be in the aviation market, with the disposal enabling the distribution arm to prosper with the investment required.
“It’s our next chapter, I think, and I do think it’s the right thing to do as well,” he said of the sale.
The disposal came after pressure from activist investors for a break-up, with financial adviser Rothschild & Co appointed in 2016 to examine such a scenario.
In May of this year, Menzies said various potential buyers had expressed interest in the division, after talks to merge it with parcels group DX collapsed in 2017.
Yesterday the group, which describes itself as one of the biggest companies in Scotland, with more than 30,000 members of staff and operating in at least 30 countries, also noted the ratification of the appointment of Forsyth Black as chief executive with immediate effect. It returns Menzies to what it described as a “more standard executive structure”.
Black said: “I believe we are well-placed to deliver our growth ambitions in the structurally growing aviation services market and I am very proud to now lead the business forward as its CEO together with the support of my team.”
The global aviation services sector is estimated to be worth about £60 billion, and Geddes said it is a “huge market out there to go after”, with Menzies eyeing organic growth and “not afraid to buy a business to bolt on or to expand what we’ve got”.
Shore Capital analyst Robin Speakman said: “We now expect all the group’s energies to flow into aviation services, a market with positive growth dynamics and one with rising opportunity from technical change and rising compliance standards.
“We believe that Menzies is very well placed to leverage market opportunities to grow organically and by acquisition in aviation services across the globe.”