Edinburgh-based John Menzies plc said on Thursday it agreed to sell Menzies Distribution, its print media division, to investment funds managed by private equity fund Endless LLP, for an enterprise value of £74.5 million.
Some of Menzies’ largest shareholders have been pressing the firm to sell the distribution business and become a pure play aviation services group.
Menzies shares rose about 10% on the news.
Once the deal is complete, Forsyth Black, currently president and managing director of Menzies Aviation, will be appointed chief executive officer of John Menzies plc.
“As part of the disposal, Menzies will retain a 10% equity stake in the business, while Menzies Distribution will be responsible for the funding of Section B of the Menzies defined benefit pension scheme, which represents 17% of the assets and liabilities of that scheme (as at 31 December 2017),” said Menzies.
“The proposed disposal creates a pure play global aviation services business that is operating in a structural growth market and marks Menzies’ exit from the market for print media and retail logistics.”
On its current trading, Menzies said: “Menzies Aviation continues to trade positively and we remain on track to deliver our full year expectations.
“Labour issues within North America continue to prevail but are being addressed and are more than offset by positive trading and continuing contract gain momentum across the rest of the network.
“Overall group net debt is in line with our expectations.
“Menzies will announce its interim results for the six months ended 30 June 2018 on 14 August 2018.”
John Menzies plc chairman Dermot Smurfit said: “I am delighted to announce today the sale of Menzies Distribution.
“In doing so we create a pure play aviation services business that operates in a structural growth market and is very well placed to take advantage of the many exciting opportunities that exist.
“In his role as Menzies CEO, Forsyth Black will now focus on growing our market share in the aviation services market, increasing our operating margins and continuing to deliver excellent services to our customers.”