The news that Eddie Stobart has been sold to Westbury Property Fund to form the Stobart Group (SGL) has finally ended speculation as to whether the nation's best known truck firm would go abroad to seek investment. The deal, which sees Stobart sold in a reverse takeover for £138m, while parent company WA Development buys £142m of property assets from purchaser Westbury, has two major advantages for Stobart. The first is its debut into the London Stock Exchange, the most immediate source of ready capital.
Westbury shares, which are suspended until the new company starts trading on 20 September, closed at 152p it will be interesting to see the value the market puts on the SGL shares when they re-emerge but analysts are likely to upgrade the company's value significantly, with its asset and revenue bases virtually doubling to an expected £250m.
The other major advantage is the intermodal infrastructure the deal brings. WA Developments, with its rail roots, has been investing heavily in multi-modal transport, most notably by buying Carlisle airport. The airport will remain the property of WA Developments, although the Stobart headquarters are still expected to move to the airfield, and William Stobart and Andrew Tinkler, both named as bosses of the new Stobart group, have said they will remain personally based in Cumbria.
But Westbury, better known to the stock market as a general property investment firm, has since 2006 been concentrating on logistics and transport land. This was a canny move quite apart from the money to be made from working the capital, demand for land is expected to massively outstrip supply within the next five years (Logistics industry must share land). In March 2006 it bought the Port of Weston in Runcorn, a 50-acre site with road, deep-sea and inland water access, and then AHC across the water in Widnes, a rail-terminal operator and storage business on a 103-acre site.
In January 2007 Westbury revealed that it would like to dispose of its general property assets and concentrate on asset-backed business. It was at this point that Tinkler, then chairman of Stobart, became aware of the company when his bank played match-maker. Previously Stobart's well-publicised hunt for capital investment had linked its name with Norbert Dentressangle, Deutsche Bahn and Keuhne & Nagel.
Tinkler told CM: "Westbury was a great fit to get investment into the business. We were introduced to it through our bank, which said this company wanted to sell its property portfolio and concentrate on asset-backed business. With the rail and port facilities it already owned, it fits what we want to do, which is to develop more on the rail and the waterways."
On the day that Westbury and Eddie Stobart merged, the new Stobart Group bought Widnes-based O'Connors, funded with £23m from the Royal Bank of Scotland. O'Connors is a rail handling business, right next door to AHC, and has 39 acres, six rail sidings, and room for storage and handling. Tinkler says: "We are going to develop one million square feet of warehousing there as our next step." O'Connors has a special relationship with shipping firm Maersk, and according to Tinkler, offers "very fast turnaround". He says they will take freight from feeder ships and offer storage on site and multi-modal distribution.
Stobart Group is proposing a five-year regeneration programme for the Port of Weston, which will include warehousing, with bonded and palletised storage new container handling facilities fronting the Manchester Ship Canal capable of handling one million tonnes of freight a year extension to the West Coast main line rail siding into a new warehouse facility a new link road between the local access and the motorway a bulk liquid tank farm and packing facility and improved shipping access between the dock and the Manchester Ship Canal.
Shipping is entirely new to Stobart's management and the Westbury board features only two members with experience in logistics - Guy Middleton, who runs the port and rail business at subsidiary Westlink, and Mark Forrest, previously operations director for the container terminal at PD Ports.
Tinkler is confident that the new terrain will be a challenge but not an obstacle. "We're still running it. It's all about the logistics and the detail and we've got a fantastic customer base to work with. Shipping allows us to take more control of the whole system and that way you can cut more waste out the supply chain," he says. "I believe this will open up new contracts for us because we can give a better service with lower costs and even a better carbon footprint for our customers."
And this is just the beginning. Runcorn is a test site, a seed for future development. "We're excited about this, the board, William and I. We're all really excited. The plan is to build a model in the North-West that works well and then we will take that around the UK. We will be looking for other acquisitions that fit this model based around road, rail and sea," he says.
Related used vehicles for sale
