Marks and Spencer Group plc announces the acquisition of Gist Limited (“Gist”), the principal contract logistics provider to M&S Food, from Storeshield Limited, a subsidiary of The BOC Group Limited. The acquisition is expected to be EPS accretive in the next year and accelerates M&S’s multi-year plan to modernise its Food supply chain network to support growth.
Gist provides the majority of M&S Food logistics services via a network of 8 primary and 10 secondary distribution centres located across the UK and the Republic of Ireland, including a number of freehold warehouses. As previously highlighted the existing arrangement has a higher cost legacy contract which expires in 2027. The acquisition will generate immediate benefits to M&S through the elimination of contractual fees and costs and the implementation of aligned operational processes. Through acquiring Gist, M&S can also take control of and invest in the network, building on the successful implementation of the “Vangarde” supply chain optimisation programme.
Under the transaction, M&S is acquiring the entire share capital of Gist for an initial consideration of £145m in cash. A further amount of £85m plus interest will be payable in cash from the proceeds of the intended onward disposal of freehold properties or, at the latest, on the third anniversary of completion. An additional profit share from the disposal proceeds of up to £25m plus interest will be payable under certain conditions. M&S has the ability to retain the freehold properties should it wish to do so in which case the full amount of £110m plus interest will be payable.
The transaction is expected to be earnings enhancing in its first full year and will be funded through existing cash reserves.
