Wincanton acquires Invar


Wincanton announced that it is set to acquire Invar Group Limited (Invar), a UK-based specialist in warehouse execution software, automation and controls. Invar, founded in 2005, specializes in the integration of automated warehouse systems utilizing its proprietary software, Invar Warehousing Software (IWS). IWS is an intuitive, flexible, and scalable software suite that intelligently orchestrates warehouse activities and allows for the seamless integration of other warehouse technologies, particularly robots and automation. 

Invar solutions have been deployed across a multitude of countries, with clients including Jet 2, Disney, and Under Armour. Infact, Wincanton and Invar have worked together on a number of warehouse automation projects in recent years. However, this acquisition is an important step towards Wincanton’s strategic goal of creating long-term supply chain value through technology and automation. It aligns people, processes, and technology, allowing Wincanton to deliver more robotics and automation projects at a faster speed to its customers. Several initiatives are already underway, with an emphasis on deploying AMR (autonomous mobile robots) to Wincanton’s existing blue-chip customer base. 

Commenting on the acquisition, James Wroath, Wincanton’s CEO, said, “This capability enhancing acquisition catapults us on our journey to become a leading integrator of automation and robotics solutions for supply chains. The Invar team is a great cultural fit, with a pedigree in developing and integrating best-in-class solutions. The combination of this, alongside Wincanton’s deep customer partnerships and operational expertise, will enable us to deliver more value, faster, for our customers.” 

While, Craig Whitehouse, Invar’s Managing Director, stated, “From the considerable interest shown in our business, we selected a partner that clearly offered the best long-term future for Invar and its people. Wincanton, with its deep resources and wealth of knowledge of the logistics sector, makes a perfect strategic partner for Invar – where our synergies on technology and automation align for a bright future. We are excited to be taking this next great step together.” 

Currently, logistics providers are competing with one another to purchase Wincanton. As stated in Ti’s latest briefing, GXO seemed to have pipped CMA-CGM/CEVA at the post through a last-minute knock-out bid for Wincanton. CEVA had made what it called a “Final Offer Price” on the 26th February, upping its previous bid by 6.7% in response to an initial approach by GXO. According to a statement from Wincanton dated on the 1st March, GXO Logistics Inc. has made a “firm intention to make a cash offer for the entire issued and to be issued ordinary share capital of Wincanton (the “GXO Offer”), for an offer price of 605 pence for each Wincanton Share”. And this is an offer that the board of Wincanton are also inclined to accept, stating that they “intend to recommend unanimously the GXO Offer and, accordingly, have withdrawn their recommendation of the increased and final* cash offer by CEVA Logistics UK Rose Limited”. However, in the details of CEVA’s statement on the 26th February, it does mention that CEVA could “increase the offer price and/or otherwise improve the terms of the Acquisition (i) if there is an announcement on or after the date of this announcement of a possible offer or a firm intention to make an offer for Wincanton by any third party”. Hence, there is a possibility of a further CEVA bid. 

What’s even more interesting about the Wincanton bidding war is that the two major credit rating agencies, Moody’s and S&P Global, have issued a cautious outlook on GXO’s offer. Both agencies placed GXO on a watch list due to the increased debt the company will incur to buy Wincanton. However, Moody’s maintains a “positive” stance on GXO. Despite the financial concerns identified in the report, the outlook remains unchanged and is not affected by the credit-negative statement.

With 16.4m sq ft of warehousing space and a presence in 160 sites, Wincanton reported revenues of £1.5bn in 2023, increasing by 2.8% compared to the previous year. The company mainly caters to the agriculture, food & perishables business which accounted for 35.1% of the total revenue in 2023. Wincanton has been focusing on enhancing its technological capabilities in its contract logistics business. The company believes that smart investments in collaborative robotic technology provide greater flexibility in its operations, allowing it to better handle the variable product volumes associated with its large-scale eFulfilment activity. 

Author: Shruti Sasidharan

Source: Ti Insights

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