Logistics deal

M&S acquires Gist to boost food supply chain

Acquiring Gist is the first step in a multi-year plan (pic: Richard Says)

Marks and Spencer is acquiring logistics firm Gist from Storeshield, a subsidiary of The BOC Group, in a deal worth up to £255m.

It will accelerate M&S’s plan to modernise and take control of its food supply chain network for the first time.

M&S will pay an initial £145m in cash. A further amount of £85m plus interest will be payable in cash from the proceeds of the intended onward disposal of freehold properties. An additional profit share from the disposal proceeds of up to £25m plus interest will be payable under certain conditions.

M&S has the ability to retain the freehold properties should it wish to do so in which case the full amount of £110m plus interest will be payable.

The Gist business being acquired generated a proforma EBITDA of c.£55m in the year ended December 2021, with the majority of profit reflecting management fees recharged to M&S under contractual arrangements, which will be eliminated upon consolidation to M&S.

The transaction is expected to be earnings enhancing in its first full year and will be funded through existing cash reserves.  

Stuart Machin, chief executive, said : “M&S has been tied to a higher cost legacy contract, limiting both our incentive to invest and our growth.

“The last two years have shown what can be achieved by working collaboratively alongside our partners at Gist. This has given me confidence that now is the time to take action and remove an impediment to our growth.

“We have therefore acted decisively to acquire Gist, taking control of our food supply chain for the first time in our history. This is the first step in a multi-year plan which will transform the entire supply chain.”

M&S seeks new CFO

Eoin Tonge, who joined M&S as chief financial officer just over two years ago, will be leaving to take up a new role as finance director at Primark owner ABF.

M&S is now seeking a successor to Mr Tonge who will remain in post in line with his notice period, which will include supporting the business through its interim results

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