📰 Apollo Strikes £2.7Bn Deal for UK Parcel Group Evri

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Estimated read time: 4 minutes

Hey 👋!

Welcome back to another issue of Finance Focus.

The UK parcel delivery market is experiencing a significant shake-up as Apollo Global Management acquires Evri, one of Royal Mail's major competitors. This deal highlights the growing competition and transformation within the delivery sector, driven by the rise of e-commerce.

With Apollo's recent acquisitions in various UK industries, this move underscores a strategic expansion in the region's logistics and services landscape.

The acquisition comes at a time of increasing market consolidation and competition, setting the stage for significant developments in the UK's delivery services market.

Here’s the article. Scroll down to read my key takeaways and thoughts on the topic.

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📰 Apollo Strikes £2.7Bn Deal for UK Parcel Group Evri

TL;DR: Apollo Global Management has agreed to acquire the UK parcel delivery company Evri from Advent International for approximately £2.7 billion.

This acquisition positions Apollo as a key player in the UK's delivery sector, which has been increasingly competitive with the rise of online shopping.

Evri, formerly known as Hermes, serves over 12 million customers weekly and has been a major competitor to Royal Mail. The deal follows Czech billionaire Daniel Křetínský's acquisition of Royal Mail's parent company, International Distribution Services.

Key Takeaways:

1. Apollo's Acquisition of Evri: Apollo Global Management is acquiring Evri, a leading UK parcel delivery company, for around £2.7 billion from Advent International. This move strengthens Apollo's position in the competitive UK delivery market.

2. Evri's Market Position: Evri, which was rebranded from Hermes in 2020, currently holds a significant market share in the UK parcel delivery sector, second only to Royal Mail and Amazon, delivering 14% of the UK's parcels by volume in 2022.

3. Advent International's Investment: During its ownership, Advent International invested approximately £200 million in Evri, enhancing its digital offerings and infrastructure to meet the growing demand for e-commerce deliveries.

4. Rising Competition in UK Delivery Market: The UK delivery sector has seen increased competition as traditional players like Royal Mail face challenges from newer, technology-focused companies like Evri. The market's dynamics are shifting due to the growing e-commerce industry.

5. Recent UK Acquisitions by Apollo: This acquisition is part of Apollo's broader strategy in the UK, following purchases of other companies like The Restaurant Group and The Travel Corporation. These moves demonstrate Apollo's commitment to expanding its footprint in various UK sectors.

Personal Thoughts:

1. Strategic Acquisition for Apollo: This acquisition is a strategic move for Apollo, given the growing demand for e-commerce delivery services. The addition of Evri strengthens Apollo's portfolio and positions it well in a market increasingly dominated by online shopping trends.

2. Competitive Landscape: The deal underscores the intense competition in the UK delivery sector, where traditional giants like Royal Mail are being challenged by agile, tech-savvy companies. Evri's significant market share indicates its strong positioning despite historical service criticisms.

3. Impact on Royal Mail: With Křetínský's recent acquisition of International Distribution Services, which owns Royal Mail, there could be significant changes and potential revitalisation efforts at Royal Mail. This could lead to increased competition and possibly improved services in the sector.

4. Investment in Technology and Infrastructure: Advent International's significant investment in Evri's digital and logistical capabilities highlights the critical role of technology and infrastructure in the future of the delivery industry. These investments are crucial for meeting consumer demands for speed and reliability.

5. Future Outlook: As Apollo continues to expand its UK investments, it will be interesting to see how this acquisition impacts the broader market. The focus on enhancing operational efficiency and expanding service offerings could set a new standard in the UK delivery market.

That’s all for today. In case you missed it: 📰 Investors Warm to UK Equities in ‘Turning of Tide’ for Unloved Market

See you tomorrow!

Afzal

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