Anthony Palazzo
Fri, October 8, 2021,
(Bloomberg) -- Royal Mail Plc agreed to purchase Canada’s Mid-Nite Sun Transportation Ltd. for C$360 million ($287 million) to expand in North America.
The acquisition will add to earnings in the current fiscal year, Royal Mail said Friday in a statement. Mid-Nite Sun will become part of London-based Royal Mail’s GLS international freight and parcel arm, extending its reach in Canada.
Royal Mail, established by Henry VIII in the 16th century, is tapping into a market with about 5% annual growth amid a worldwide boom in online shopping. The deal allows family-owned Mid-Nite Sun, which operates as Rosenau Transport, to add parcel delivery to its main freight business. The Rosenau network will also tie into existing GLS routes on the U.S. west coast, extending its cross-border capacity.
Shares of Royal Mail advanced 0.8% to 416.9 pence as of 8:14 a.m. in London. The stock is up 23% this year amid a turnaround effort and higher demand for home delivery.
Rosenau Transport posted revenue of C$175.0 million and earnings before interest, taxes, depreciation and amortization of C$41.6 million in the 12 months through August. It has 24 owned facilities throughout four Canadian provinces.
Royal Mail said it expects the purchase to close on Dec. 1, subject to regulatory approval. It will be funded by cash and debt.
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