Agility to acquire John Menzies

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Supply chain company Agility will acquire 100% of aviation company John Menzies at a price of 608p a share.

The purchase values Menzies at approximately £571m (US$750m) on a fully diluted basis and at approximately £763m (US$1bn) on an enterprise value basis. The board of Menzies intends unanimously to recommend the cash offer to their shareholders.

Following the acquisition, Kuwaiti firm Agility will combine Menzies with its current aviation subsidiary National Aviation Services (NAS) under the Menzies name. The revenues of Menzies and National Aviation Services (NAS) were in excess of US$1.5bn in 2021. It is currently expected that the transaction will complete in the third quarter of 2022.

Following the acquisition, it is intended that Menzies and NAS will be managed by a team with representatives drawn from both Menzies and NAS with the current CEO, chief financial officer and chief operating officer of Menzies in these roles in the combined group. The current CEO of NAS is expected to assume the role of chairperson of the combined group, which will be governed by a professional board of directors through an appropriate governance structure.

While keeping Menzies’ corporate hub and head office in Edinburgh, Scotland, Agility also intends to open a new head office for the combined group in London, where some senior management and some head office functions will be located. The combined group is expected to have approximately 35,000 employees with a presence at 250 airports in 57 countries, handling around 600,000 aircraft turns per year. Agility expects the combination to provide both companies with a broader customer base and therefore the resources to invest in talent development, technology, infrastructure and sustainability. The growth is projected to help both companies recover from the effects of the Covid-19 pandemic.

Hassan El-Houry, chief executive of National Aviation Services, said, This deal creates a world leader in airport services and unlocks value for all stakeholders. The NAS-Menzies combination brings together highly complementary operations and ensures that the combined business has the scale and resources to grow. Menzies shareholders will realize a premium in return for supporting the transaction. Customers will benefit from Menzies’ operational excellence at more airports around the world and will be able to choose from a broader product offering. Employees of both companies will benefit from being part of a larger, stronger group that offers more career development and advancement opportunities. The combined business will have the capital to invest in the talent, technology, innovation, infrastructure, equipment and sustainability leadership required to accelerate growth.”

Philipp Joeinig, chairman and chief executive of John Menzies, said, “The Menzies directors believe that the offer represents a fair and recommendable price for shareholders which recognizes Menzies’ future prospects. Menzies is an outstanding business with a long and rich history. The Board of Menzies applauds the work that the Menzies management team have done to steer the business through the challenging impacts of the pandemic and position the business for continued future growth and the next evolution in its journey. The Menzies all-cash offer from Bidco represents an opportunity for current shareholders to realize value for their investment at an attractive premium and valuation multiple.”

Tarek Sultan, vice-chairman of Agility, said, “Agility’s focus is on growth and shareholder value creation. We are a long-term, multi-business operator and investor aiming to create value with a disciplined investment strategy that focuses on companies in high-growth sectors with strong fundamentals, reinforced by management teams with established records, best-practices governance, and alignment with Agility’s vision and values.

“Menzies is a good fit. The aviation sector has strong growth potential, and Menzies is one of the most-established providers in the industry, with a sustainability focus we share. A NAS-Menzies combination will create a strong and resilient industry player, well positioned to grow and drive future earnings. We expect this acquisition to further diversify Agility’s revenue base and strengthen cash flow generation.”

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