Menzies Distribution has been sold to a private equity firm for £74.5m.
Parent company John Menzies will now focus on its aviation division after reaching a conditional agreement with Endless LLP.
Menzies had been under pressure from major shareholders to split up the company for some time. An August 2017 bid to sell the news distribution business to parcel firm DX Group fell through after several months of talks.
New owner Endless has a history of revitalising the businesses it takes over. It rescued The Works from administration in 2008; the Menzies deal comes less than a week after Endless listed the discount bookseller on the London Stock Exchange in a £100m flotation.
A spokesperson for Endless said its acquisition of Menzies Distribution (MDL) “will enable the business to build on its successful growth and diversification strategy, working in long-term partnership with publishers to secure a sustainable route to market for their product and further support building and harnessing MDL’s UK network to partner with national parcel carriers and become a provider of choice to the retail sector.”
Menzies Distribution distributes more than 6.5 million newspapers and magazines daily, employing around 3,700 people across 54 sites in the UK and Ireland.
It recently secured a major primary distribution deal to collect all daily and regional weekly newspapers printed by news publisher Reach and deliver them to all wholesale distribution locations across the UK.
An increase in its carriage charges by an average of 2.7% in April drew an angry response from retailers, prompting the NFRN to call for a “complete overhaul” of the news wholesale distribution network.
NFRN National President Mike Mitchelson hinted as this as he gave the acquisition a cautious welcome: “We look forward to meeting with the new owners in due course to understand its plans, vision and how it sees the future of newspaper and magazine distribution. At the same time, we will take the opportunity to share members’ concerns about current practices in the supply chain which, hopefully, Endless will address.
“According to its website, Endless exists ‘to make business better for everybody’, so we look forward to seeing some real improvements in the working relationship between the news wholesaler and its retail customers and would welcome some much-needed investment.”