UK business services company Hays, which recently announced that it was to focus on its personnel unit, could be set to sell its Hays Logistics unit to UK buyout firm Cinven.
Cinven has emerged as the most likely winner in the race to acquire the business, which reported EBIT in the year to 30 June 2002 of £45.7m on turnover of £880m. Mergermarket reports that trade buyers such as TPG and Deutsche Post have cooled their interest in the business. John Allan, chief executive of UK logistics group Exel, has said that the company is considering a bid for the business.
Hays is hoping to recoup around £400m for the unit, although the continued economic downturn and a reduction in the unit’s performance could see the price come in as low as £250m. Hays Logistics sales were up three per cent in 2002, although profits declined from £23m in the first half to £18.1m in the six months to 31 December 2002.
Last year, Hays' pre-tax profits for the six months to 31 December fell 26 per cent to £76.1m from £103m in the same period of 2001. At the time of the company’s half year results last month, Hays chairman Bob Lawson said: “We believe that the value of our businesses can best be maximised by following a different strategy. There are excellent opportunities to continue to develop Hays Personnel but the Logistics and Commercial Divisions, whilst strong and capable in their own right, will be divested.”
Cinven had originally planned to back a former Hays Logistics executive in making the offer, although it plans to structure the deal to enable current management to join the offer. Other possible financial buyers for the business include CVC Capital Partners and Electra.