Haulier buys up rival to move into top five

Sep 18 2007 by James Barton, The Journal

HAULAGE firm Hargreaves Services is set to become one of the top five players in the chemical road tanker sector after the purchase of a rival.

County Durham company Hargreaves has bought Imperial Tankers, one of its smaller competitors, in a deal which could be worth £7m. Hargreaves has agreed on an initial payment of £5m, with an extra £2m offered on condition the combined business is performing well after one year of trading.

The acquisition of Billingham Imperial Tankers by Hargreaves is part of the group’s plans for rapid expansion as it aims to drive up annual sales by 50% to £400m by 2009.

Imperial Tankers is the latest in a series of buys by Hargreaves in recent years, which include that of Yorkshire material handling company Norec Ltd and the assets of Maltby Colliery and Humber-based Simon Bulk Warehousing and Distribution.

Hargreaves said it planned to make more acquisitions in the haulage sector in the near future.

Hargreaves directors said Imperial Tankers, which had a turnover of £16m and pre-tax profits of £1.35m, would immediately boost earnings.

The merger increases Hargreaves’s workforce to more than 2,000, including 120 employees from Imperial Tankers, and its market capitalisation to more than £160m.

As well as haulage, Hargreaves has a wide portfolio which includes producing coke products, selling ash for grouting or recycling in the cement industries and supplying a wide range of other minerals. It is also the largest independent importer of domestic and industrial coal in the UK. The purchase of Imperial Tankers will extend Hargreaves’s operations in the movement of liquid products such as petroleum spirit and edible oils.

Chief executive Gordon Banham said: “Imperial is an excellent and well-run chemical tanker business which is also a perfect fit with our own business.

“The integration of the two businesses will start immediately and will result in significant synergies and savings. We view the growth potential of the combined chemical tanker operations as very encouraging.”

But he said the synergies would not mean a cut in jobs at either company and that the deal paved the way for further growth of the businesses.

A spokesman for Hargreaves, said: “In no way should this acquisition be seen as a hostile takeover. Imperial Tankers is a successful business with strong trading figures. Both parties have decided that this deal is beneficial to their future growth.”