Herbert Smith Freehills has advised long-standing client Connect Group PLC, a leading specialist distributor, on the acquisition of Tuffnells Parcels Express, a leading UK provider of next day business-to-business delivery of mixed freight/parcel consignments, and on its rights issue and extension of the Group's current debt facilities, both of which will fund the acquisition.
The acquisition is a key part of Connect Group’s strategic ambition to diversify into carefully chosen markets so as to achieve 50 per cent. of its profits from outside newspaper and magazine wholesaling. Connect Group will acquire Tuffnells from its current management team and strategic investor, Cavendish Square Partners. The transaction announced on 12 November 2014, with completion anticipated to take place before the end of the year. The consideration for the acquisition is up to £128.7 million to be funded by the Company's recently extended debt facilities and the proceeds of a 2 for 7 rights issue at 102 pence per share, being approximately £55 million, which was announced at the same time as the proposed acquisition. The rights issue is underwritten by J.P. Morgan Cazenove and Liberum Capital. Alongside J.P Morgan Cazenove and Liberum, Lazard also provided financial advice to Connect Group.
The Herbert Smith Freehills team was led by corporate partners Robert Moore and Mike Flockhart and associates Gareth Sykes and Kashmira Halai, supported by client relationship partner Roddy Martin.
They were assisted by Brian O'Malley, Katie Crocker, Charlotte Courtney, Dan Kenny and Sarah Penfold (corporate). Kristen Roberts led the team advising on the extension of Connect Group's debt facilities, assisted by Salonika Kataria and Stacey Pang. Steve Thierbach, Jess He and Jacob Eiser advised on the US aspects of the fundraising. Susan Black and Tim Briggs provided competition advice, assisted by Lisa Geary and Tanya Macrae. William Arrenberg and Sara Stewart advised on tax matters. Tim Leaver, Annabel Gillham, Ruth Liddicoat and Hannah White provided employment advice. Samantha Brown and Simon Evans advised on pension issues and incentives advice was provided by Paul Ellerman and Bradley Richardson. Julian Pollock, assisted by Helen Gale and Victoria Haslam, advised on the real estate aspects of the transaction. Laura Deacon and Victoria Horsley advised on IP issues and TMT advice was provided by David Coulling and Duc Tran. Julie Vaughan advised on environmental and health & safety issues.
Roddy Martin commented:
"We were delighted to assist Connect Group on another transaction. This is a highly significant strategic deal for them and a key step in the continued diversification of the Group away from newspaper and magazine distribution. The HSF team very much enjoyed working closely with Stuart Marriner, General Counsel & Company Secretary, and the whole Connect Group team throughout the process."
Tuffnells was advised by Eversheds LLP. J.P. Morgan Cazenove and Liberum Capital were advised by Simmons & Simmons LLP. The Group's lending banks were advised by Pinsent Masons LLP.
