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Investing.com -- Shares of InPost climbed +4% as the company announced its acquisition of a 95.5% stake in UK parcel delivery company Yodel. The move, which converts InPost’s existing £106m loan into equity, is seen as a significant step in InPost’s UK market expansion efforts.
The transaction is poised to bolster InPost’s market share in the UK to approximately 8%, making it the third-largest agnostic e-commerce player in the region, trailing only Royal Mail (LON:IDSI) and Evri. The acquisition is strategically equivalent to five years of organic growth for InPost.
It is expected to increase the company’s UK parcel volume to over 300 million per annum by expanding its merchant base to more than 700 e-commerce stores. Additionally, the deal enhances InPost’s service offering by combining next-day to-door delivery with its extensive Automated Parcel Machine (APM) network.
InPost’s strategy includes diversifying its activities, with the UK poised to account for around 30% of its revenues. The company has also set ambitious targets for Yodel, aiming for the subsidiary to become EBITDA accretive within one year. In the mid-term, InPost is targeting a high-20s EBITDA margin in the UK, a significant increase compared to the 17% margin reported in FY24.
The market’s positive reaction reflects confidence in InPost’s growth trajectory and its ability to integrate Yodel effectively. By operating the largest APM and Out-of-Home networks, InPost is positioned to offer a unique value proposition to the e-commerce sector in the UK.
Despite Yodel’s EBITDA loss of £36m on revenues of £482m in FY24, InPost’s management is optimistic about the potential for profitability and market position enhancement following the acquisition.
A Fieldfisher team of Tim Bird, Jim Sharkey, Adam Jones and Wes Grimm acted for Yodel. Fieldfisher’s Ruth Lewis (JO:LEWJ) and Maxine Smith acted for management, while CMS advised Inpost and Pinsents advised PayPoint.
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