Marks and Spencer has announced the acquisition of Gist, M&S Food’s main contract logistics provider.
The company previously belonged to Storeshield, a subsidiary of The BOC Group.
The acquisition is expected to increase EPS (Earnings per Share) next year and help M&S achieve its multi-year plan to modernise its food supply chain network to support growth.
It should be noted that M&S Food has re-established an industry-leading position in volume growth over the past four years.
It developed bigger, better stores and entered new channels through investment in Ocado Retail and through franchise partnerships, including over 2,500 Costa stores.
Gist provides the majority of M&S Food logistics services through a network of eight primary and 10 secondary distribution centers located across the UK and Republic of Ireland, including a number of freehold warehouses.
The existing agreement has a higher cost legacy contract that expires in 2027. The acquisition is expected to bring immediate benefits to M&S through the elimination of contractual fees and costs and the implementation of aligned business processes.
At the same time, through this acquisition, M&S can take control and invest in the network, building on the successful implementation of the ‘Vangarde’ supply chain optimisation programme.
M&S acquires the entire share capital of Gist for US$607,60 million (£145 million) in cash. A further US$103,29 million (£85 million) plus interest will be payable in cash from the proceeds of the intended further disposal of the freehold properties or, at the latest, on the third anniversary of completion.
An additional profit share from the disposal proceeds of up to US$30,38 million (£25 million) plus interest will be payable subject to certain conditions. M&S has the option to retain the freehold properties if it wishes, in which case the full US$133,67 million (£110 million) plus interest will be payable.
