London, August 10, 2020 – Hermes UK, the leading consumer delivery company, is to benefit from a significant investment by Advent International (‘Advent’), one of the largest and most experienced global private equity firms. This follows an announcement from Otto Group, that it has formed a partnership with Advent for its Hermes Group businesses in the UK and Germany.
Under the terms of the deal, Advent will partner with the current management team to acquire a 75% stake in Hermes UK. Otto Group will continue to own 25% of the company. The transaction will facilitate further investment by Hermes in technology and infrastructure and support the future growth of the business in the rapidly growing parcel delivery sector. The management of Hermes UK will continue to lead the business as an independent company, with ‘business as usual’ for employees, suppliers and customers.
This follows a recent announcement by Hermes UK that it is looking for more than 10.5K ‘parcel people’ to join its business, to meet the huge demand created by people shopping at home during lockdown, and the continuing growth in the sector. Hermes UK predicts that parcel volumes will reach record levels during the Black Friday and Christmas period.
Martijn de Lange, CEO at Hermes UK, said: “This is fantastic news for Hermes UK as we continue our upwards trajectory in the fast-growing and capital-hungry home delivery sector. The investment will enable us to remain independent and be agile and responsive to future market requirements. It will help to expedite the development of our capacity and technology, supporting the introduction of new innovative products and services that will greatly benefit our retail clients and their customers.”
Advent has extensive experience of successfully partnering with management teams to develop and grow market leading businesses. Current investments in the e-commerce and logistics sector include InPost, a company which provides secure self-service lockers for the collection, return and delivery of parcels that has seen significant growth since Advent’s involvement.
In addition to the 75% shareholding in Hermes UK, Advent will also acquire a 25% stake in Hermes Germany, which includes other Hermes Germany Group companies including BorderGuru and a share in the ParcelLock joint venture.
The transaction with Otto Group is subject to approval by the boards and relevant antitrust authorities.
Goetzpartners, Goldman Sachs and UBS (corporate finance) and Kirkland & Ellis (legal) advised Advent in connection with the transaction.
Notes to editors
The partnership will not affect Hermes’ activities in Russia and Austria, the holding company Hermes Europe or the companies not involved in parcel delivery, namely Hermes Fulfilment, Hermes Einrichtungs Service, Girard Agediss, Hansecontrol and Otto International.
About Hermes UK
Hermes UK is one of the UK’s leading consumer delivery companies, successfully delivering over 400 million parcels a year on behalf of many of Europe’s leading retailers. The company has experienced sustainable double-digit growth for the past 7 years, consistently reinvesting profit into its proposition, infrastructure and people. Last year it became the first company to provide its self-employed couriers with holiday pay following a ground-breaking deal with the GMB Union.
About Advent International
Founded in 1984, Advent International is one of the largest and most experienced global private equity investors. The firm has invested in over 350 private equity transactions in 41 countries, and as of March 31, 2020, had €44 billion in assets under management. With 15 offices in 12 countries, Advent has established a globally integrated team of over 200 investment professionals across North America, Europe, Latin America, and Asia. The firm focuses on investments in five core sectors, including business and financial services; healthcare; industrial; retail, consumer and leisure; and technology. After 35 years dedicated to international investing, Advent remains committed to partnering with management teams to deliver sustained revenue and earnings growth for its portfolio companies.