Marks and Spencer to acquire contract logistics provider Gist Limited
British retailer Marks and Spencer Group has agreed to acquire Gist Limited, a contract logistics business, from Storeshield Limited, a subsidiary of The BOC Group, for an initial consideration of £145 million in cash.
Gist Limited is the main contract logistics provider to Marks and Spencer’s M&S Food.
According to Marks and Spencer, the acquisition of Gist Limited will expedite the multi-year plan of M&S Food for modernizing its food supply chain network to underpin growth.
Gist Limited offers the majority of the logistics services of M&S Food through a network of eight primary and 10 secondary distribution centers across the UK and the Republic of Ireland.
Marks and Spencer to acquire contract logistics provider Gist Limited for £145m. Photo courtesy of Marks and Spencer plc.
Through the acquisition of Gist Limited, M&S Food can also gain control of and invest in the network and building on the implementation of the Vangarde supply chain optimization program.
Marks and Spencer said that for acquiring Gist Limited, an additional £85 million amount plus interest will be paid in cash from the proceeds of the planned onward sale of freehold properties or, at the latest, on the third anniversary of the deal closing.
An additional share in profits from the proceeds of the sale of up to £25 million plus interest will be paid under some conditions. M&S Food will be able to retain the freehold properties if it wishes to do so in which case the full amount of £110 million plus interest will be paid, said Marks and Spencer.
Stuart Machin — Marks and Spencer Chief Executive said: “M&S has been tied to a higher cost legacy contract, limiting both our incentive to invest and our growth. The last two years have shown what can be achieved by working collaboratively alongside our partners at Gist.
“This has given me confidence that now is the time to take action and remove an impediment to our growth. We have therefore acted decisively to acquire Gist, taking control of our Food supply chain for the first time in our history. This is the first step in a multi-year plan which will transform the entire supply chain.”