10.08.2020 | Hamburg
One of the largest and most experienced private equity investors Advent International (“Advent”) is taking a 25 percent shareholding in Hermes Germany and 75 percent in Hermes UK. This step opens up new opportunities for the Otto Group's parcel logistics companies to expand their current leading position in the two most important delivery markets in Europe.
As already announced at the annual press conference on 27 May 2020, the Otto Group is entering into a partnership in the parcel delivery sector in order to develop further growth potential in this highly competitive and rapidly growing business segment. An agreement has been signed with Advent to acquire a 75 percent stake in Hermes UK and 25 percent stake in Hermes Germany. The transaction is subject to approval by the boards and relevant antitrust authorities.
In both the UK and Germany, Hermes has continuously strengthened its market position in recent years - in the 2019/20 financial year, the companies transported more than 760 million parcels. In the current financial year, both businesses are recording high volume growth against the COVID-19 pandemic backdrop. In response to this and in expectation of continued growth in the parcel delivery sector, Hermes is further expanding its staff capacity.
"The enormous interest shown by potential market partners in an investment reflects the attractiveness of the market segment and Hermes’ excellent market position in the two most important delivery markets in Europe. The partnership with Advent gives both companies further scope for essential investments and thus creates optimal conditions for further growth," says Kay Schiebur, Member of the Executive Board, Services, Otto Group. "Advent’s logistics expertise in areas such as locker delivery will also help us to further develop our business model".
Ranjan Sen, Managing Partner and Head of the German Office at Advent International, says: “Advent has significant experience in working successfully with family-owned companies and has previously enjoyed collaborating with the Otto Group with the takeover of the payment service provider Ratepay in 2017. We look forward to deepening this relationship and using our sector expertise to further grow Hermes’ potential in this highly competitive and rapidly growing business segment.”
Following this transaction, the Otto Group retains the majority of shares in Hermes Germany, and its core German market. In the UK, the Otto Group is relinquishing its majority shareholding in Hermes UK, while retaining representation in major strategic decisions. The operational management of both companies will continue with their respective management teams. Cooperation with Hermes' business partners and clients will also remain unaffected.
"Thanks not least to massive investments in a powerful and flexible network, Hermes has shown in recent months that retailers and end customers can rely on unrestricted high quality delivery, even in an unprecedented environment such as the COVID-19 pandemic," says Kay Schiebur. "At the same time, the parcel service once again shows how fundamental it is to have functioning competition in the market and the resulting choice for customers. We are pleased that we are now investing in even better delivery quality and additional services in partnership with Advent l and can thus continue on our successful path".
Advent's stake in Hermes Germany also includes the other Hermes Germany Group companies, including BorderGuru, Liefery and Hermes Germany's share in the ParcelLock joint venture. The partnership will not affect Hermes' activities in Russia, France and Austria, the holding company Hermes Europe or the companies not involved in parcel delivery, namely Hermes Fulfilment, Hermes Einrichtungs Service, Girard Agediss, Hansecontrol and Otto International.
Jobst Honig, +49 (30) 59 00 46 9-13
Jacqueline Niemeyer, +49 (69) 92 18 74-71
Founded in Germany in 1949, today the Otto Group is a globally active retail and services group with around 52,000 employees in 30 major company groups and does business in over 30 countries in Europe, North and South America, and Asia. Its business activities are grouped into three segments: Multichannel Retail, Financial Services, and Service. In the 2019/20 financial year (to 29 February), the Otto Group generated revenues of 14.3 billion euros. With online revenues of approximately 8.1 billion euros, the Otto Group is one of the world’s largest online retailers. The Group’s particular strength is its broad market presence and differentiated product and service offers to diverse customer target groups in almost all of the world’s relevant economic regions. Numerous strategic partnerships and joint ventures provide the Otto Group with excellent opportunities to transfer know-how and leverage areas of synergy potential. Group companies demonstrate a high degree of corporate responsibility and willingness to collaborate with one another; at the same time this guarantees flexibility, customer proximity and optimum target-group appeal in their respective national markets.
Founded in 1984, Advent International is one of the largest and most experienced global private equity investors. The firm has invested in over 350 private equity transactions in 41 countries, and as of March 31, 2020, had €44 billion in assets under management. With 15 offices in 12 countries, Advent has established a globally integrated team of over 200 investment professionals across North America, Europe, Latin America, and Asia. The firm focuses on investments in five core sectors, including business and financial services; healthcare; industrial; retail, consumer and leisure; and technology. Advent has extensive experience in working with family-owned businesses in Germany. Examples include its close and trustful collaboration with the founding family on the refocusing of Douglas Holding, a leading European retail conglomerate, and its successful cooperation with Otto Group on the acquisition of invoice payment specialist Ratepay. After 35 years dedicated to international investing, Advent remains committed to partnering with management teams to deliver sustained revenue and earnings growth for its portfolio companies.
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