Royal Mail subsidiary, General Logistics Systems (GLS), has acquired the regional next day parcel delivery company, Golden State Overnight Delivery Service Inc (GSO). The acquisition provides GLS with a focused and targeted market position within the US.
Established in 1995, GSO primarily operates in California, but also operates in Arizona, Nevada and New Mexico. It offers priority, ground and freight shipping services, mainly to business-to-business customers across a range of industries. It operates a hub and spoke network of 36 facilities, with around 1,900 employees.
It is reported that the area in which GSO operates has a GDP roughly equivalent to the UK and that, with around 13.5m deliveries per year, GSO has approximately 1% share of its addressable market
The total consideration paid for 100% of the shares in GSO is $90m (approximately £70m), which will be funded from existing resources. The company is being acquired on a debt free, cash free basis. GSO generated revenue of approximately $114m in the year ended 31 March 2016.
GSO will be fully consolidated within GLS for reporting purposes but will be managed as a separate entity. Dana Hyatt, GSO Chief Executive Officer, will continue to lead the company with GSO’s existing management team.
Rico Back, Chief Executive Officer, GLS, said, “The acquisition of GSO is in line with our strategy of careful and focused geographic expansion. GSO operates in an attractive regional market representing the world’s fifth largest economy, and provides GLS with an opportunity to grow GSO within its existing footprint.”
Sources: London Stock Exchange, General Logistics Systems
