This week has seen a flurry of merger and takeover activity in the road transport market, with three medium-to-large firms changing hands. Wincanton Group led the way with its £25m swoop on container haulier Hanbury Davies last Thursday. But this wasn’t the only deal in the container sector: shipping line K-Line has taken control of 80-truck Felixstowe haulier Ralph Morton, adding to its existing container transport firm James Kemball. At least one other large Felixstowe-based container haulier is believed to be up for sale.
Ralph Morton declined to comment, and no-one was available from K-Line at the time of going to press. Meanwhile, £11m turnover Norfolk haulier Derek Cooper (Transport), which was licensed to run more than 100 trucks, has had its assets acquired by Newmarket haulier Turners (Soham) and Matthews International in Great Yarmouth. Sources indicate that Turners has bought the bulk powder operation at Red Lodge near Newmarket, and Matthews the general haulage operation at Blofield near Norwich – it is now trading as Coopers of Norwich.
The last set of accounts for Derek Cooper (Transport), which were filed in December last year, reveal that the directors had been looking to sell the business for some time. It reads: "During the year... the [Norwich] depot was actively marketed and it is likely a sale will be completed in early 2008. The directors are also considering an offer for the purchase of the assets of the Red Lodge depot. If this were to go ahead the company’s trade would effectively cease." No-one from Turners (Soham) was available to comment; Matthews declined to comment.
Accountants say the sudden burst of takeovers has been prompted by changes to Capital Gains Tax (CGT), announced last autumn in the pre-Budget report. The changes to the taper relief element of CGT mean that from 6 April, the rate of tax paid by individuals selling their businesses will leap from 10% to 18%. In the case of the Hanbury Davies deal, this would have meant the tax bill soaring from £2.5m to £4.5m.
The looming deadline for the tax hike means that many want-away operators are racing to clinch deals to avoid massive extra payments. Richard Farnsworth, tax director at accountancy firm PricewaterhouseCoopers, says: "The changes mean that we are seeing a growing number of people looking to sell their business before 5 April. I have a number of transactions underway that have been triggered by these changes."