Royal Mail buys Canadian parcel business for £213m

Royal Mail has expanded into Canada, buying Dicom Canada for its General Logistics Systems subsidiary for £213 million.

Dicom Canada primarily provides business-to-business parcel services, operating across Canada, with a major focus on the Eastern Canadian provinces of Ontario and Quebec. Last year it had revenue of C$233 million.

It offers ground-based parcel, freight and logistics services through a network of 28 depots and works with partner carriers across Canada to provide pan-Canadian logistics services.

Royal Mail chief executive Rico Back: “This acquisition is in line with GLS’ strategy to grow through targeted and focused acquisitions to capture higher growth segments outside Europe. With its strong presence in Eastern Canada and primary focus on the business-to-business segment, Dicom Canada’s business model is similar to GLS’ as it provides a high quality delivery service, based on its focus on reliability and excellent customer satisfaction.”

GLS now accounts for 33 per cent of Royal Mails adjusted operating profit – up from 29 per cent in 2016-7.

The acquisition from Wind Point Partners, a Chicago-based private equity firm, does not include Dicom’s US business.

Dicom Canada will continue to be led by Rick Barnes, President, together with Dicom Canada’s existing management team.