News

US private equity firm takes stake in Hermes

Hermes

Otto Group plans to sell most of its stake in Hermes, potentially offering the courier the additional financial firepower it needs for its aggressive expansion plans.

Advent, a US-based private equity firm, has bought 75% of the carrier’s UK and 25% of its Germany operations for an undisclosed sum.

The deal will leave Hermes with its existing independent management teams in both countries. Operations in other countries such as Russia, France and Austria will be unaffected.

The news came after Hermes announced it is investing £100 million in its UK operations to support the pandemic-driven surge in ecommerce.

The company will spend the money partly on hiring 1500 new full-time staff, including head office staff, drivers, warehouse operatives, managers and supervisors. Hermes also wants to hire a further 9000 self-employed couriers, who will be entitled to some employee benefits due to the company’s agreement with the GMB Union.

The funds will also fund new infrastructure, including an additional 90 new sub depots, new vehicles and brand new customer service technology.

Kay Schiebur, Member of the Executive Board, Services, Otto Group, said: “The enormous interest shown by potential market partners in an investment reflects the attractiveness of the market segment and Hermes’ excellent market position in the two most important delivery markets in Europe. The partnership with Advent gives both companies further scope for essential investments and thus creates optimal conditions for further growth.

“Advent’s logistics expertise in areas such as locker delivery will also help us to further develop our business model.

“Thanks not least to massive investments in a powerful and flexible network, Hermes has shown in recent months that retailers and end customers can rely on unrestricted high quality delivery, even in an unprecedented environment such as the COVID-19 pandemic.

“At the same time, the parcel service once again shows how fundamental it is to have functioning competition in the market and the resulting choice for customers. We are pleased that we are now investing in even better delivery quality and additional services in partnership with Advent l and can thus continue on our successful path”.

Ranjan Sen, managing partner and head of Advent’s Germany office, said: “Advent has significant experience in working successfully with family-owned companies and has previously enjoyed collaborating with the Otto Group with the takeover of the payment service provider Ratepay in 2017. We look forward to deepening this relationship and using our sector expertise to further grow Hermes’ potential in this highly competitive and rapidly growing business segment.”