Regulatory Announcements
04 June 1999
BOC Cargo Services is a leading independent air cargo handler in the UK with operations at Heathrow, both on and off airport, and at Birmingham and Manchester airports, handling over 150,000 tonnes of cargo per annum for more than 30 airline customers, employing 240 staff. Its key customers include Air Hong Kong, Airtours, Alitalia, Britannia, Finnair, Gulfair, LOT, Polar and TAP.
In Australia BOC operates an air cargo facility in Melbourne and have announced plans to develop a similar facility in Sydney. MTS will continue to implement such plans.
David Mackay, Chief Executive of John Menzies, said:
"The acquisition of BOC Cargo Services is a significant development for MTS which in the last two years has built a substantial UK cargo handling, trucking and forwarding operation centred on Heathrow airport, the country's principal air cargo hub."
"Adding BOC Cargo Services, with its substantial facilities and capacity, to our existing Concorde Express business and London Cargo Centre partnership firmly establishes MTS as the UK's largest independent air cargo handler. This is a major landmark in the Group's strategy of developing MTS into a leading operator of airport services in the UK."
"The combined cargo business will add significant mass for the development of handling and associated services in the UK. MTS will be serving airlines in all the major alliances, as well as a significant number of independents."
Martin Gwynn, Managing Director of BOC Distribution Services ("BOCDS"), said:
"The sale of the cargo business is part of the strategic re-alignment of BOCDS to focus on providing high value total supply chain solutions for its key customers. The provision of a cargo handling service is not regarded as core to BOCDS's future strategy and I believe that the sale to MTS provides a good future for both the cargo business and its people."
Following this acquisition MTS, including its partnership venture The London Cargo Centre, will be handling 320,000 tonnes of air cargo covering more than 60,000 flights annually. MTS now holds a 20% share of the key Heathrow air cargo handling market, and will have a 40% share of its third party market handling cargo for airlines without their own facilities. With its other airport services MTS now has operations at 8 UK airports, employing 1,400 staff.
The UK operations of BOC Cargo Services are currently forecast to record a loss of £900,000 on turnover of £11.8m. The consideration for the acquisition of the UK operation will be £4.9m payable in cash, which will be applied in acquiring net assets of approximately £2.7m subject to final valuation. The business is expected to return to profitability during its first full year following acquisition. A further announcement regarding the purchase of BOC Cargo Services' Australian cargo operation will be made in due course.
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ACQUISITION OF BOC CARGO SERVICES
John Menzies plc, through its subsidiary Menzies Transport Services ("MTS"), has bought the UK operations of BOC Cargo Services from The BOC Group plc ("BOC"), for £4.9m in cash. In addition MTS has agreed in principle to buy BOC's air cargo handling operations in Australia.BOC Cargo Services is a leading independent air cargo handler in the UK with operations at Heathrow, both on and off airport, and at Birmingham and Manchester airports, handling over 150,000 tonnes of cargo per annum for more than 30 airline customers, employing 240 staff. Its key customers include Air Hong Kong, Airtours, Alitalia, Britannia, Finnair, Gulfair, LOT, Polar and TAP.
In Australia BOC operates an air cargo facility in Melbourne and have announced plans to develop a similar facility in Sydney. MTS will continue to implement such plans.
David Mackay, Chief Executive of John Menzies, said:
"The acquisition of BOC Cargo Services is a significant development for MTS which in the last two years has built a substantial UK cargo handling, trucking and forwarding operation centred on Heathrow airport, the country's principal air cargo hub."
"Adding BOC Cargo Services, with its substantial facilities and capacity, to our existing Concorde Express business and London Cargo Centre partnership firmly establishes MTS as the UK's largest independent air cargo handler. This is a major landmark in the Group's strategy of developing MTS into a leading operator of airport services in the UK."
"The combined cargo business will add significant mass for the development of handling and associated services in the UK. MTS will be serving airlines in all the major alliances, as well as a significant number of independents."
Martin Gwynn, Managing Director of BOC Distribution Services ("BOCDS"), said:
"The sale of the cargo business is part of the strategic re-alignment of BOCDS to focus on providing high value total supply chain solutions for its key customers. The provision of a cargo handling service is not regarded as core to BOCDS's future strategy and I believe that the sale to MTS provides a good future for both the cargo business and its people."
Following this acquisition MTS, including its partnership venture The London Cargo Centre, will be handling 320,000 tonnes of air cargo covering more than 60,000 flights annually. MTS now holds a 20% share of the key Heathrow air cargo handling market, and will have a 40% share of its third party market handling cargo for airlines without their own facilities. With its other airport services MTS now has operations at 8 UK airports, employing 1,400 staff.
The UK operations of BOC Cargo Services are currently forecast to record a loss of £900,000 on turnover of £11.8m. The consideration for the acquisition of the UK operation will be £4.9m payable in cash, which will be applied in acquiring net assets of approximately £2.7m subject to final valuation. The business is expected to return to profitability during its first full year following acquisition. A further announcement regarding the purchase of BOC Cargo Services' Australian cargo operation will be made in due course.
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