Scotland business

Edinburgh firm John Menzies buys marketing firm for £20m

John Menzies truck and staff member
Image caption John Menzies said the acquisition would take its distribution arm into new business sectors

John Menzies is to expand its printed media distribution operations after buying a logistics and marketing services company in a deal worth up to £20m.

The distribution and aviation firm said it had reached agreement to acquire the entire issued share capital of Kent-based Orbital Marketing Services Group.

Orbital is 51% owned by BP Direct Mail Company and 49% by Rydlings.

John Menzies said the move would take its distribution arm into new sectors.

Under the terms of the deal, the Edinburgh-based group will pay £7.7m up front with a further £5.9m payable at the end of 2014.

Up to a further £6.3m may be paid over if "exceptionally high levels of profit performance" were to be achieved by December 2014.

Orbital comprises a portfolio of UK-based logistics and marketing services businesses serving the travel, tourism, education, charity, publishing and healthcare sectors.

Orbital, which reported an operating profit of £2.2m last year, was established in 1972 and employs more than 550 staff at nine locations across the UK.

John Menzies chairman Iain Napier commented: "This acquisition allows us to expand our printed media distribution footprint whilst also taking a large stride into adjacent growth areas.

"The team are now focused on integrating these new businesses and driving through the significant synergies that have been identified."

He added: "While the majority of the group's expansion will continue to come from our industry-leading aviation services business, this acquisition allows Menzies Distribution to grow by enlarging its printed media distribution capabilities and opening up new markets with strong growth opportunities."

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