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Highlights:
- IDS (LSE:IDS) acquires a 20% stake in ACS, Greece’s largest parcel delivery firm, for €74 million.
- The deal includes a call option to acquire the remaining 80% of ACS within two years.
- The acquisition reflects IDS’s strategy to expand its presence in Europe despite ongoing regulatory uncertainties.
Royal Mail owner International Distributions Services PLC (LSE:IDS) has announced the acquisition of a 20% stake in ACS, Greece’s largest parcel delivery company, for €74 million (£62 million). ACS has been a key network partner of IDS’s international parcel subsidiary, GLS, since 2004. The deal includes a call option to acquire the remaining 80% within two years.
ACS operates across mainland Greece and the Greek islands with over 270 outlets and eight distribution hubs, including a state-of-the-art automated hub in Athens. For the 12 months to June 2024, ACS generated approximately €155 million in revenue and underlying earnings of around €29 million.
IDS chief executive Martin Seidenberg described the deal as a “significant and rare opportunity” to invest in a leading independent carrier in Europe, aligning with GLS’s strategic goals. Seidenberg emphasized that the investment strengthens IDS’s service offering in a major European market not currently served by the GLS network.
While analysts have pointed out the high acquisition price, estimated at 12.8 times EBITDA for the initial 20% stake, it reflects the scarcity of large, independent parcel operators in Europe. Peel Hunt’s Alexander Paterson noted that the price underscores the value of securing a foothold in a competitive market.
The acquisition comes as IDS faces uncertainty regarding its future, including potential regulatory hurdles. The proposed takeover by Daniel Křetínský’s EP Group may struggle to gain approval under the National Security and Investment (NSI) Act, and the company awaits a decision from regulator Ofcom on its universal service obligation (USO) requirements.
Despite these challenges, IDS sees this acquisition as a strategic move to bolster its growth in Europe through both organic and inorganic opportunities.
