US investment group Apollo has struck a deal to buy UK parcel delivery company Evri, gaining control of a significant competitor to Royal Mail.
The acquisition is valued at approximately £2.7 billion, according to sources familiar with the matter.
This move places Apollo in a key position within the UK’s competitive delivery sector, which has seen substantial shifts in recent years.
A strategic move amid growing competition
The acquisition of Evri from its current private equity backers, Advent International, marks a significant investment in the UK’s parcel delivery market.
Advent had previously acquired the business in 2020 through a €1 billion deal for the UK operations of the Hermes parcel delivery group from German mail-order company Otto.
Rebranded as Evri two years later, the company now serves over 12 million customers weekly, highlighting its significant presence in the market.
This deal comes shortly after Czech billionaire Daniel Křetínský’s £5.3 billion acquisition of International Distribution Services, the parent company of Royal Mail.
The UK delivery sector, traditionally dominated by Royal Mail, has faced increasing competition from rivals like Evri, which have capitalized on the growing demand for online shopping deliveries.
In 2022, Evri delivered 14 per cent of the UK’s parcels by volume, trailing only Royal Mail and Amazon, according to Pitney Bowes.
Investments and improvements under Advent International
Under Advent International’s ownership, Evri has focused on enhancing its service quality and expanding its technological and infrastructural capabilities.
Historically criticized for poor service, the company has made significant investments aimed at meeting the rapid delivery demands of e-commerce consumers.
Advent’s managing partner, Ranjan Sen, stated that the group had invested approximately £200 million in Evri over four years, significantly enhancing its digital offerings and overall market position.
“Evri is now one of the leading parcel delivery companies in the UK with strong momentum for the future,” said Sen.
The company’s advancements have not gone unnoticed, as it attracted interest from several rival delivery groups during the sales process.
Apollo private equity partner Alex van Hoek emphasized the strategic value of the acquisition, stating,
Evri has built an enviable position in parcel delivery, with an innovative model, technology and infrastructure purpose-built for reliable, lower emissions delivery in the fast-growing e-commerce market.
The broader implications for the UK delivery market
The acquisition by Apollo is part of a broader trend of increased investment and consolidation in the UK delivery sector.
Apollo has been actively expanding its portfolio of UK companies, including last year’s £506 million acquisition of Wagamama-owner The Restaurant Group and the recent agreement to buy Contiki-owner The Travel Corporation.
Evri’s sale and Apollo’s investment come at a critical time for the UK delivery market, which is undergoing significant changes.
Royal Mail, grappling with declining demand for letter deliveries, faces renewed competition from parcel-focused companies.
Křetínský’s recent takeover of Royal Mail includes plans for substantial investments aimed at revitalizing the former state-owned group, potentially intensifying competition for Evri and other players like DHL and DPD.
Way forward for Evri
As Apollo takes the reins of Evri, the company’s strategic focus on technological enhancements and infrastructure investments will likely continue.
This acquisition not only underscores the competitive nature of the UK delivery market but also highlights the ongoing transformation driven by the surge in online shopping.
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