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Polish parcel locker operator InPost plans to buy its French counterpart Mondial Relay for € 565 million, as it seeks to capitalize on the surge in e-commerce triggered by the coronavirus pandemic.
InPost said on Monday it expected the all-cash deal with German Mondial owner Otto Group, which has yet to be approved by regulators and Mondial’s workers’ council, to be finalized by now the end of the second trimester.
The transaction would mark the Polish locker room group’s first significant foray outside its home market and nearly double its revenues, which already doubled to 2.5 billion zloty (553 million euros) last year as the pandemic swept across Europe. The group operates automated lockers for customers to collect the products they have purchased online.
“This is a big addition, a big step forward, and it opens a whole new chapter in front of management and in front of the company,” Rafal Brzoska, CEO and founder of InPost, told the FT.
Otto Group said in a statement that the deal was part of a “realignment” of its logistics activities that it announced at the end of last year. He added that Mondial’s current management team will remain in place.
InPost’s move for Mondial Relay follows a wave of transactions in the European retail sector, as investors rush to support businesses able to capitalize on the changing habits of consumers forced to stay at home by consumers. lockdowns caused by the pandemic.
Poland’s largest e-commerce platform, Allegro, was listed on the Warsaw Stock Exchange last year, during the country’s largest IPO, while InPost was listed in Amsterdam in January.
Brzoska said at the time that part of the reason for listing in Amsterdam was to facilitate InPost’s international expansion and identified the UK, France, Spain and Italy as the markets that it would target first.
The deal for Mondial Relay – which achieved a turnover of 437 million euros last year and operates 15,800 pick-up and drop-off points – will make InPost the second player in France, which, according to InPost, was the third largest e-commerce market in the EU.
This will also allow the company to be less present in Spain, the Netherlands and Belgium.
InPost said the transaction would be fully funded by a newly signed bridging loan provided by a consortium of seven banks, including JPMorgan, Pekao SA and BNP Paribas.
The loan will push InPost’s net debt to a multiple of 3.5 times its earnings before interest, taxes, depreciation and amortization. However, the company said it aims to reduce the ratio to between 2.5 and 2 times ebitda within two years of the transaction.
The company expects the deal to increase its ebitda, which nearly tripled to 994 million zloty (€ 217 million) last year, from € 100 million to € 150 million in the “medium term”, and Brzoska said the combined business will generate strong cash generation.
However, he added that InPost is not planning any further acquisitions at this time. “I think we still have a lot of dry powder. But just to be very, very clear: we don’t have any other item with an M&A angle on our agenda, ”he said.
“Our main objective is to complete the transaction, to convince the workers’ council and, at the same time, to continue our deployment in Poland and the United Kingdom.”
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