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Xpediator, which operates freight services under the Delamode brand, is to buy and ocean and sea freight forwarder Regional Express for just over £2m.
It represents the UK freight forwarder and e-commerce logistics provider’s second purchase since its recent listing on the London Stock Exchange to fund an acquisition spree.
Regional Express has two lines of business: global air and sea freight forwarding freight forwarding; and e-commerce, including VAT registration, customs clearance and air and sea transport from the US and Far East into the UK for Amazon sellers.
It also recently established a UK team to develop the same concept from the UK to the US.
In the financial year ending March 2017, it generated revenue of £6m, an adjusted operating profit of £305,000 and a net profit of £198,000.
Xpediator chief executive Stephen Blyth said: “Regional Express is an exciting, profitable niche operator, which will fit well into the Xpediator group, adding significantly to our air and sea freight operations, two areas where we have been looking to expand our presence.
“We also expect there will be a number of synergistic opportunities through offering Regional’s clients the wider services of the Xpediator group, in particular in warehousing and fulfilment, plus our European Network.
“Regional’s growing business with Amazon is a key attraction for us and one which will increase our exposure to the fast growing e-commerce market. There is potential for Regional to develop the relationship further with Amazon and we believe that will be enhanced by becoming part of the enlarged group.”
Regional founder Eric Buggy said: ““Regional Express has grown impressively in recent years, but we recognised we needed to share a larger platform to maintain this growth.
“Equally important was finding a partner that shares our focus on high customer service, strong customer relationships and entrepreneurial flair.”
The purchase will likely be paid in two instalments. Following completion, £1.2m – £1.08m in cash and £120,000 in new Xpediator ordinary shares – and a further cash payment reflecting Regional’s working capital position at completion, estimated to be approximately £130,000.
A secondary payment of £700,000 in cash may also be payable to Mr Buggy following a two-year earn-out period, during which his position will be assumed by Neil Curran, who has worked for Regional for almost five years and currently holds the position of logistics coordinator.