Acquisition of Regional Express Limited

06 November 2017
Acquisition of Regional Express Limited
RNS Number : 5921V
Xpediator PLC

6 November 2017

Xpediator Plc (“Xpediator” or the “Group”)

Acquisition of Regional Express Limited

Xpediator, (AIM: XPD) a leading provider of freight management services across the UK and Europe, is pleased to announce it has acquired Regional Express Limited (“Regional Express”, or “Regional”), a UK-based freight forwarder and international courier (the “Acquisition”).  The initial consideration payable on completion is £1.2m comprising £1.08m in cash and £0.12m in new Xpediator ordinary shares. Plus a further cash payment reflecting Regional’s working capital position at completion estimated to be approximately £130,000. Further consideration of up to £0.7m in cash may also be payable contingent on the future trading performance of Regional Express.

Acquisition highlights:

  • Regional Express generated revenue of £6.0m, operating profit of £249k and profit after tax of £198k during the year ended 31 March 2017 (“FY17”)
  • Adjusted operating profit in FY17 is £305k normalising for exceptional items and non-recurring costs
  • Cash consideration will be funded from existing resources
  • Regional Express is an asset-light operation providing B2B international road, sea and air freight services from their bases in Dorset and Hampshire
  • Regional Express is an approved service provider to Amazon Global Selling providing competitive door-to-door services, VAT registrations and freight forwarding services
  • On completion the enlarged Group will operate from 6 sites in the UK together with 11 European offices employing over 690 people
  • Acquisition is expected to be immediately earnings enhancing

This is the Company’s second acquisition since IPO, and like Benfleet Forwarding Limited (the Company’s first acquisition), was identified as a corporate target in the Company’s admission document.

Regional Express

Regional Express, headquartered in Hampshire, England, is an international B2B freight forwarding and courier business working across the following regions: Europe, North America, South America, Africa, Asia and Australia. The company specialises in road, sea and air freight services.

Regional Express organises for Amazon sellers VAT registration, customs clearances and transport of goods via air and sea freight from the USA and Far East into the UK. Recently, Regional Express has established a UK team to develop the same concept from the UK to the USA.

Stephen Blyth, Xpediator CEO, commented, 

“Regional Express is an exciting profitable niche operator and one which will fit well into the Xpediator Group, adding significantly to our existing 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 is enhanced by Regional becoming part of the enlarged Group.

We are very pleased that Regional will be led by Neil Curran, who will continue to be mentored by Eric Buggy over the Earn Out period. Neil is a very experienced freight forwarder and has the necessary ambition to drive the company forward.

We have been in dialogue with Regional since before our IPO in August and I am delighted that we have concluded the transaction. I feel confident the business will be significantly earnings accretive for our shareholders.”

Eric Buggy, founder of Regional Express, said,

“Regional Express has grown impressively in recent years, benefitting in particular from services provided to the e- commerce sector, but we recognised we needed to share a larger platform to maintain this growth.  As part of the Xpediator Group, we are confident of further growing our operations from leveraging their larger platform, and in particular, the award winning EshopWedrop division.  Equally important was finding a partner who shares our focus on high customer service, strong customer relationships and an entrepreneurial flair; in the Xpediator team, we have found such a partner.”

Potential Acquisition Benefits

  •  Expansion of the Group’s air and sea freight activities.
  • Potential to expand upon the relationship with Amazon sellers by building upon the already established relationship with Regional and offering Amazon customers the capabilities of the enlarged Group.
  • Expected synergies through providing warehousing and fulfilment services.
  • Eric Buggy, co-founder of Regional Express, will continue as a consultant to the business for two years post acquisition.
  • Minimum integration costs, the business will continue to operate under the Regional brand.
  • The amount of further consideration is wholly dependent on Regional’s profits for the two years ending 31 October 2019.

Consideration payable

The Acquisition consideration comprises:

  • an initial payment of £1.2m payable on completion, comprising £1.08m in cash together with the issue of 377,953 ordinary shares of 5 pence each in Xpediator (“Ordinary Shares”), issued at a price of 31.75 pence per Ordinary Share being the average closing price for the five days preceding completion of the Acquisition. The consideration shares are subject to customary lock-in arrangements; plus
  • a further cash payment reflecting Regional’s working capital position at completion estimated to be approximately £130,000; plus
  • a further payment (the “Earn Out Payment”) of up to a maximum of £0.7m based on the profitability achieved by Regional Express for the two years ending 31 October 2019. The Earn Out Payment will be settled 90% in cash and 10% in new Ordinary Shares which are to be issued at the average closing price for the five days preceding their issue. Up to a maximum £0.35m Earn Out Payment will be based on Regional Express’ results for the year ending 31 October 2018 with the balance payable based on the results for the year ending 31 October 2019: in any event the Earn Out Payment will not exceed £0.7m.

Admission of New Ordinary Shares

Application has been made to the London Stock Exchange for the admission of 377,953 new Ordinary Shares to trading on AIM. Admission of the new Ordinary Shares is expected to take place at 8.00am on 9th November 2017. Xpediator’s total issued share capital following admission will consist of 110,431,144 Ordinary Shares with one voting right per share. The above figure of 110,431,144 may be used by shareholders as the denominator for the calculations by which they can determine if they are required to notify their interest in, or a change to their interest in, the Company following admission.

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.


Xpediator plc      

Tel: +44 (0)330 043 2395

Stephen Blyth, Chief Executive Officer

Richard Myson, Chief Financial Officer

SP Angel Corporate Finance LLP (Nominated Advisor & Joint Broker)     Tel: +44 (0)20 3470 0470

Jeff Keating

Caroline Rowe

Richard Parlons, Elizabeth Johnson (Sales)

Cantor Fitzgerald Europe (Joint Broker)                                                                 Tel: +44 (0)20 7894 7000

David Foreman, Callum Butterfield (Corporate Finance)

Alex Pollen, Caspar Shand Kydd (Sales)

Novella Communications (Financial Public Relations)                                    Tel: +44 (0)20 3151 7008

Tim Robertson

Toby Andrews

About Xpediator:

Xpediator is a well-established international provider of freight management services. Established in 1988 by CEO Stephen Blyth today the Company’s international network of offices provides regular and direct services linking Eastern Europe, the Balkans and the Baltics with Western Europe, together with logistics and warehousing in the UK and Romania. The business offers integrated freight management within the supply chain logistics and fulfilment sector, through their three main areas: freight forwarding, logistics & warehousing and transport services. With headquarters in Braintree, Essex and country offices in eight CEE countries across 22 sites, the Group currently employs over 690 people and was successfully listed on London’s AIM market in August 2017.


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