Marks and Spencer has acquired the logistics provider to its food arm for £145m, with the supermarket “taking control of our food supply chain for the first time in our history.”
The premium supermarket said on Thursday the acquisition from Storeshield, owned by The BOC Group, would aid its multi-year plan to modernise its food supply chain network.
Gist already provides the majority of logistics services for M&S Food, with a network of eight primary and 10 secondary distribution centres across the UK and the Republic of Ireland.
M&S will reap immediate rewards from the takeover, including the scrapping of contractual fees and costs.
An existing higher cost legacy contract had limited “both our incentive to invest and our growth,” M&S chief executive Stuart Machin said.
“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,” he added.
“This is the first step in a multi-year plan which will transform the entire supply chain,” Machin said.
The takeover will enhance M&S earnings next year, with the acquisition generating a proforma EBITDA of around £55m in the year ending December 2021.
The supermarket is acquiring the entire share capital of Gist for an initial consideration of £145m in cash.
An additional £85m plus interest will be payable in cash from the proceeds of the intended onward disposal of freehold properties or, at the latest, on the third anniversary of completion, M&S added.
A further profit share from the disposal proceeds of up to £25m plus interest will be payable under certain conditions.
It comes as retailers have struggled with supply chain disruption in the past few years, resulting in bouts of empty supermarket shelves.