This is a bid by TNT to strengthen its UK position. Taylor Barnard's expertise in warehousing and its presence in the healthcare and fast moving consumable goods sectors fit well with TNT's target industries. As the UK is the most competitive logistics market in Europe this purchase will spur competitors to make further local acquisitions.
Simply on its financials, Taylor Barnard is a good buy. It generated sales of E118 million and has showed an average annual growth in turnover of 12% over recent years. Although Taylor Barnard's price tag remains undisclosed, TNT's purchase will secure a strong foothold in the UK market, where it will benefit from the local operator's multi-user business. In particular, Taylor Barnard has developed a notable position in the healthcare and fast moving consumable goods (FMCG) sectors, which are also target industries of the TNT Post Group. In the UK, TNT boasts clients in sectors such as automotive, grocery retail, pharmaceutical, hi-tech, tires and print and paper. With healthcare already being a particularly strong industry for TNT, it will benefit most from Taylor Barnard's expertise in FMCG.
Along with its contracts and multi-user facilities, Taylor Barnard brings to the deal a large fleet of dedicated vehicles and warehousing facilities, temperature controlled capabilities and expertise in value added activities such as labeling and packaging.
This latest acquisition follows that of CTI Logistics, which is set to strengthen the Group's operations in the global automotive industry. Through acquisitions TNT has developed a leading logistics operation across Europe. In the UK, the company's contract logistics operations rank in the top 10 operators, behind such companies as Exel, Tibbett and Britten, Wincanton Logistics and Christian Salvesen. The acquisition of Taylor Barnard should raise the company's profile in this territory.
TNT may have sealed the fate of other remaining independent operators in the UK. As one of Europe's most competitive logistics markets, the UK has already seen considerable consolidation in recent years. European operators will likely follow TNT's lead and seek to enter and strengthen their capabilities through the acquisition of established local operators.