Moving on: UK logistics sector looks to M&A in the wake of Brexit and COVID.

The UK’s logistics sector is emerging from challenging times, looking to grow and diversify through acquisition.

The UK logistics sector has emerged from a period of unprecedented uncertainty and opportunity. Operators in the industry are looking to the future positively, despite the challenges posed by Brexit and the Covid pandemic, and the latest research suggests that the coming 12 months could bring more consolidation and investment to the sector.

Here, we take a detailed look at the UK logistics industry and the latest deals that illustrate a new appetite for acquisitions and mergers in the sector.

Looking back

The importance of the UK logistics industry has been highlighted by the pandemic. Never before has the country, as a whole, appreciated or relied upon the sector to quite the same degree. The sector has kept the country moving and trading throughout the crisis and we’ve all appreciated this from our homes during lockdown.

However, continuing to operate and scale up activity, as was necessary over the past 12 months, took great focus and dedication. As the UK’s vaccination programme starts to pay off and we return to a greater sense of normality, operators in the logistics sector are also able to take a breath and review their situation.

So, it’s timely that UK Logistics and CBW have published their interim UK Logistics Sector M&A Index for Q1 2021. The report offers an insight into some of the larger and more influential players in the market, asking how they feel about the year ahead and the industry’s future more generally.

M&A set to get a boost in the coming months

Most notably, perhaps, the study found that 28 per cent of the respondents in the survey said they are more likely to carry out M&A activity than they were a year ago. In addition, some 35 per cent said they are likely or very likely to undertake M&A activity in the coming 12 months.

The results of the survey suggest that many logistics operators are moving forward, away from simply rising to the challenges set out before them. Instead they are ready to focus on growth and development. And companies are not just looking to grow through acquisition, they are also ready to pay more for the privilege.

Some 38 per cent of those who took part in the survey said they believe that logistics businesses are now worth more than they were a year ago. The average increase in value is thought to be some 16 per cent, according to CBW and UK Logistics, who carried out the survey.

Overall, the UK Logistics Sector M&A Index has increased from 45.4 in September 2020, to 55.7 in the first quarter of 2021, which is a remarkable increase of over 22 per cent. The improvement in a number of key metrics is testament to the progress made in the UK over the past 6 months, which has been vital for the industry. Not only are we winning the fight against Covid-19, with retail and hospitality set to open up fully at some point in summer 2021, the UK also struck a trade deal with the EU towards the end of 2020, which helps allay fears about the UK’s trading future in the bloc.

A closer look

In the final quarter of 2020, some 15 deals were completed in the sector, valued at an estimated £153 million, according to statistics put together by BDO. A third of these deals involved investment from private equity companies, showing that they still have a major part to play in stimulating logistics M&A.

Growth through PE-investor backed acquisition is likely to be a major driver of deals in the coming 12 months. One of the UK logistics businesses that has already hit its dealmaking stride over recent months is Menzies Distribution. The business is set on expanding its geographical footprint to aid its growth and has the backing of private equity group Endless LLP.

Menzies have just announced the takeover of a Scottish rival, JBT Distribution, which specialises in distribution and warehousing services, but is especially active north of the border, with headquarters in West Lothian and depots in Aberdeen, Inverness, Kilbride, Lerwick and Kirkwall. JBT has annual sales totalling some £23 million, which makes it an appealing prospect for Menzies, which has ambitious expansion plans.

“We are gaining momentum at pace as we execute our ambitious strategy for growth and are delighted to acquire JBT. We believe that through combining the complementary business with Menzies, there are significant opportunities to grow both businesses through unlocking further geographical capability and expanding services to both sets of customers in Scotland and throughout the UK and Ireland, “ explained Menzies CEO, Greg Michael.

Through the deal, Menzies has added to its blue-chip customer base and has added 200 vehicles to its fleet, as well as enhancing its B2B service capabilities.

JBT Director Robert Gordon also welcomed the deal, claiming Menzies, “aligned with the future strategic and growth plan in the sectors in which we operate and will enhance the service offering of the business both locally and nationally.”

This takeover follows an early deal already carried out by Menzies within the past few months. It took over Bibby Distribution in December 2020. Bibby had a 30-year reputation for supply chain services across the UK. The takeover saw Bibby rebranded as Menzies Distribution Solutions. The joining of the two businesses created a mammoth enterprise, consisting of 4,000 vehicles, 100 depot locations across the nation and 5,000 employees.


Caribou is a British logistics business that has been expanding rapidly, mainly through acquisition, over recent months and years. One of its latest purchases, made in January 2021, is the takeover of C&D Transport Solutions, which has added expertise in haulage and same-day deliveries to Caribou’s already impressive list of services. Caribou has added several other firms to its list of acquisitions, including Grantham-based Lincolnshire County Couriers towards the back-end of 2020. It has announced more deals in even more recent months, including Six Ten Logistics in March and Alton-based TMCouriers in February.

Caribou has enjoyed massive increases in demand for its freight logistics, shipping and haulage services thanks largely to its tie-ins with Amazon and eBay. These online retailers have proven incredibly popular during the pandemic, offering a lifeline to consumers unable to shop for goods in person. Meeting this demand has been a challenge for Caribou, which has responded by adding expertise and capacity through acquisition.

Caribou’s website says the business has completed three deals in 2021 already and has further ‘future acquisitions planned’.


Although M&A activity is clearly healthy within the logistics sector in the UK, the respondents to the CBW survey did voice a level of trepidation. Global economic uncertainty, especially in reference to the ongoing pandemic, was seen as a potential threat to growth. Also, staff shortages and ongoing EU/UK trade uncertainties are also on the list of factors that still keep logistics business owners awake at night.

However, on the whole, the future looks bright and operators are willing to adapt to changing market conditions in order to survive and grow. Some 23 per cent said they expect to diversify in order to respond to changes, and, for many, acquisition is the best way of achieving this.

Also read the latest report on M&A in the UK logistics sector

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