TDG reveals plans to widen European reach

13 March 2006 00:00  [Source: ICB]

TDG’s purchase of Mond this month is the first step in a series of acquisitions planned to expand its geographical reach.

Speaking at a company presentation on 1 March, TDG’s chief executive David Garman said: ‘While the Mond acquisition will help give us coverage in Benelux, northern France and the German Ruhr area, we cannot cover the whole of our target area from there.’

With net cash of £10m (€15m/$17m) the company is well placed for more deals and Garman said an obvious next place for the UK-based logistics company to look would be Iberia.

TDG already has some contracts and a business in Iberia, although it does not have a full management team there. It is planning to move to a new distribution centre in Barcelona, Spain, later this year.

Mond, a family business based in Welkenraedt, Belgium, serves the regional market for packed speciality chemicals. Of the £17.9m purchase price, £9.5m was settled on completion with further sums of up to £2.1m dependent on results up to 31 December 2007.

Garman expects the acquisition to be earnings enhancing in the first year and is forecasting earnings before interest, tax, depreciation and amortisation (Ebitda) of £3m. Mond is predicted to turn in Ebitda of £2.6m for 2005.

He noted that the packed chemicals sector is growing particularly fast and said this has offset the fall that TDG saw in UK network transport volumes last year.

This decline has led to a marginal drop in 2005 operating profit for TDG’s chemical division to £5.2m from 2004’s £5.3m. Turnover was up 2% to £123.2m.

¦ Meanwhile, JohnsonDiversey has awarded TDG a contract to manage its UK supply chain. The deal renews the contract for its packed distribution business worth an annual £5m, and provides a further £10m worth of new business per year.

Garman commented: ‘We have designed an innovative way to re-engineer Johnson-Diversey’s UK logistics network, which will substantially reduce costs’.

TDG will manage co-packing and promotional activity, procurement and management of intermediate bulk containers, bulk transport and the management of JohnsonDiversey’s warehouse at Alfreton.

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly