French postal technology group Neopost has acquired US parcel locker company Parcel Pending for more than $100 million as part of a new international growth strategy that includes $400 million for M&A deals.
Neopost, which has diversified in recent years from a mostly mail-focused systems provider, presented its ‘Back to Growth’ strategy covering 2019-2022 at an investor event last week. The main points are a focus on four business areas, a geographical focus on large markets in Europe and North America, possible divestment of non-core businesses, and a group reorganisation to integrate and streamline its diverse businesses.
Moreover, the French group said it is prepared to spend up to €100 million on average per year on M&A deals in its growth business areas over the 2019-2022 period.
Neopost explained that it had made a strategic review of its business activities and had decided to invest strongly in the nascent and fast-growing Parcel Locker business, with a focus in the United States, which it views as “a key geography”. Neopost already has the world’s third-largest number of installed parcel lockers with approximately 4,400 units, mainly in Japan and France. The U.S. is estimated to account for 40% of the worldwide market excluding China.
Parcel Pending, founded by CEO Lori Torres in 2013, is the leading package solution provider for residential, commercial, retail and universities across the United States and Canada. The company, with more than 150 employees and thousands of customers, had revenues of more than US$30 million in 2018. Torres will remain CEO of Parcel Pending and will lead the Neopost locker initiative in the U.S.
Neopost CEO Geoffrey Godet said: "Parcel lockers is one of the four selected solutions we want to grow in the future. For Neopost, the acquisition of Parcel Pending is a major step forward in entering the very promising American parcel locker market. We are delighted to welcome Parcel Pending’s passionate team within Neopost. The combination of Neopost and Parcel Pending’s recognized technologies and know-how will enable us to provide state-of-the-art solutions and expand fast in the U.S. market.”
Parcel Pending CEO Lori Torres added: “We are excited to join the Neopost family and leverage their fantastic team and expertise. Neopost was the perfect fit for Parcel Pending, as like us, they are committed to providing world class customer service and innovation to our customers.”
Neopost said that Parcel Lockers “are rapidly emerging as the most efficient solution to solve the last mile delivery issue, bringing significant benefits to carriers, retailers, property and facility managers as well as to consumers”.
Overall, the new “Back to Growth” strategy aims at expanding and growing the group while accelerating its transformation to reach by 2022 a more balanced business profile designed to deliver sustainable and profitable organic growth.
The group intends to:
* Reinvest in its highly cash generative legacy Mail Related Solutions offering;
* Focus on four major solutions: Mail Related Solutions; Business Process Automation; Customer Experience Management; and Parcel Locker Solutions; in major European countries and North America;
* Seize bolt-on acquisition opportunities
* Streamline the organization
* Either grow, improve or divest its Additional Operations by no later than 2022;
Godet explained: "As part of our ambitious “Back to Growth” strategy, we intend to refocus the group’s operations on a selection of four major solutions in a few main geographies. This involves shifting the organization of the group from three independent business units operating a highly fragmented product portfolio into a more cohesive company, which is the best way to unlock synergies.
“We are convinced that concentrating our efforts on businesses offering the potential to be sizeable, growing and profitable offers the best warranty to successfully transform the company. This strategy requires more flexibility in our capital allocation policy to be able to seize M&A opportunities which, in turn, would contribute to rebalance our business mix, enhance the growth profile of the Group and create more value for our shareholders.”
