3i sells stake in Target Express to Rentokil Initial
3i, a global leader in private equity and venture capital, has sold its majority stake in Target Express, the UK’s largest independent express delivery company, to Rentokil Initial plc. The value of the transaction is not disclosed at this time.
Since 3i’s initial investment in Target Express in 2000 alongside co-investor Gresham Private Equity, it has helped the company become the leading independent next-day parcels delivery business in the UK. 3i introduced an experienced private equity Chairman, David Hoare, to the board and has since worked closely alongside the whole management team to drive revenue growth for the company and value for shareholders. Turnover and operating profit of Target Express for the year to 30 April 2006 were £146.1m and £17.3m respectively.
Stephen Keating commented: “Customer service is paramount in this type of business and Target’s management team has worked tirelessly to make sure an efficient customer relationship management system and culture was implemented. Rentokil Initial’s existing parcel delivery business, City Link, is a highly complimentary business to Target, with a similar operating model and customer service-based culture, making this a natural opportunity for the company to enter its next phase of development.”
Target Express is a parcels delivery business with its core business activity in UK next day delivery. It was created 25 years ago by three entrepreneurs and has grown into a well established, profitable business operating from 39 branches with a main hub in Coventry. Target currently has a market share of 6% and remains one of the most profitable UK operators in this space.
3i was advised by Hawkpoint, and legal advice provided by DLA.