This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 (“MAR”). Market Soundings, as defined in MAR, were taken in respect of the proposed Placing with the result that certain persons became aware of inside information, as permitted by MAR. That inside information in relation to the Placing is set out in this Announcement and has been disclosed as soon as possible in accordance with paragraph 7 of article 17 of MAR. Therefore, those persons that received inside information in a Market Sounding are no longer in possession of inside information relating to the Company and its securities.

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF LOCAL SECURITIES LAWS OR REGULATIONS. THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN EDDIE STOBART LOGISTICS PLC OR ANY OTHER ENTITY IN ANY JURISDICTION.

Eddie Stobart Logistics plc
(“Eddie Stobart” or the “Company”)

Acquisition of The Pallet Network Group Limited and Placing of shares to raise £30 million

Further to the announcement made on 7 June 2018, Eddie Stobart, a leading UK supply chain, transport and logistics group, is pleased to announce that it has entered into an agreement to acquire the entire issued share capital of The Pallet Network Group Limited (“TPN”), a leading provider of pallet distribution services across UK and Ireland, for total consideration of £52.8 million, on a cash and debt free basis (the “Acquisition”). Completion of the Acquisition is expected to occur on or around 29 June 2018 following admission of the Placing Shares.

Eddie Stobart also announces a placing with institutional investors to raise £30 million before expenses (the “Placing”) through the issue of 21,428,572 Placing shares of 1 pence each in the capital of the Company (“Placing Shares”) for 140 pence (“Placing Price”) per Placing Share. The Placing was well supported by new and existing institutional investors.

Of the total consideration of £52.8 million, £44.14 million is payable in cash upon completion and the remaining £8.66 million will be payable to certain of the Sellers over a period of two years following completion. The Acquisition will be funded in part by the net proceeds of the Placing and in part through the extension of the Eddie Stobart group’s (“Eddie Stobart Logistics”) existing debt facilities with its current syndicate of lending banks.

Alex Laffey, Chief Executive Officer of Eddie Stobart, commented:
“We are delighted that TPN will be joining Eddie Stobart Logistics. TPN is a leading player in pallet distribution across the UK and we are confident that this transaction will significantly enhance our capabilities in a space in which we do not currently operate and consequently offers cross-selling opportunities to serve our clients’ growing needs. I would like to welcome Mark Duggan, Managing Director, the management team and the TPN network members to Eddie Stobart Logistics and look forward to working closely with them all. This acquisition is in line with our strategy and the Board is confident that TPN will strengthen our position as a leading provider of end-to-end supply chain solutions.”

Background to and strategic rationale for the Acquisition
The acquisition of TPN significantly enhances Eddie Stobart Logistics’ existing skills and capabilities, including meeting customers’ needs for next day, less than truck load deliveries, positioning Eddie Stobart Logistics in an attractive segment which has grown at a significantly greater rate than the wider logistics market over the last three years. The Directors believe that this combination will provide benefits to both businesses and to TPN network members, through cross-selling to existing Eddie Stobart UK customers and collaboratively deploying our enhanced operating model into Europe. The TPN management team, led by Mark Duggan, will continue to run the TPN business following completion. The Acquisition is expected to be earnings and cash enhancing in Eddie Stobart Logistics’ 2018 financial year.

About TPN
TPN is one of the UK’s leading palletised freight distribution networks offering premium, economy and tail-lift services throughout the UK and Ireland.

Founded in 2000 and headquartered in Minworth, TPN operates the UK’s second largest pallet network, comprising 106 regional hauliers (“members”). TPN’s hub-and-spoke model provides distribution services from three central hubs in Minworth, Preston and Northampton to a total of 121 distribution sites.

Employing over 230 staff, TPN processed approximately 3.9 million pallets in the twelve months to 31 March 2018, with daily capacity for up to circa 21,000 pallets for customers across a broad range of sectors. TPN has a loyal membership base, with the majority of members having formed part of TPN’s network for more than ten years. For the period from 15 December 2015 to 31 March 2017, TPN recorded audited EBITA of £5.3 million and profit before tax of £0.8 million on revenues of £119.5 million and as at 31 March 2017, had net assets of £0.4 million.

For the twelve months to 30 November 2017, TPN generated unaudited revenues of £108.9 million and adjusted EBITA of £5.8 million.

The Sellers of TPN are LDC, Neil England and the TPN management team, being Mark Duggan, Paul Robinson and Mark Kendall. The acquisition provides an exit for TPN’s institutional investor, LDC, the private equity arm of Lloyds Banking Group. The Placing and the Acquisition are inter-conditional.

The Placing
The Board is pleased to announce that the Company has conditionally raised gross proceeds of approximately £30 million through a placing (the “Placing”) of 21,428,572 new Placing Shares at a price of 140 pence per share. The Placing has been undertaken with new and existing institutional shareholders by Cenkos Securities PLC (“Cenkos”) and Joh. Berenberg, Gossler & Co. KG, London Branch (“Berenberg”)

The net proceeds of the Placing (after commission and expenses of the Placing of approximately £1 million) will be used to fund the Acquisition and for general corporate purposes. The Placing Price represents a discount of 0.4% to the closing middle market price of 140.5 pence per existing ordinary share on 27 June 2018, being the last Business Day before the announcement of the Placing.

The Placing Shares will, when issued, rank in full for all dividends and other distributions declared, made or paid on ordinary shares by reference to record dates falling after their date of issue and otherwise rank pari passu in all respects with the existing ordinary shares.

Application has been made for the Placing Shares to be admitted to AIM and, subject to the Placing and the Acquisition becoming unconditional, it is expected that Admission will become effective and trading in the Placing Shares will commence at 8:00 a.m. on 29 June 2018.

The Placing and the allotment of the Placing Shares are being made pursuant to existing authorities to allot shares and disapply pre-emption rights under section 551 and section 570 of the Companies Act 2006, which the Directors were given at the Company’s Annual General Meeting held on 29 May 2018.

Total Voting Rights
Following admission of the Placing Shares, Eddie Stobart’s issued ordinary share capital will comprise 379,347,372ordinary shares. Therefore, the total number of ordinary shares with voting rights in Eddie Stobart following admission will be 379,347,372.

The above figure of 379,347,372 may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, Eddie Stobart under the FCA’s Disclosure Guidance and Transparency Rules.

Enquiries

Eddie Stobart Logistics plc
Alex Laffey, Chief Executive Officer
Damien Harte, Chief Financial Officer
www.eddiestobart.com
call via FTI Consulting

Cenkos Securities Plc (Nomad & Joint Broker)
Elizabeth Bowman / Jeremy Osler / Harry Hargreaves
www.cenkos.com
+44 (0)20 7397 8900

Berenberg (Joint broker)
Chris Bowman / Toby Flaux / James Brooks
eddiestobart@berenberg.com
www.berenberg.com
+44 (0)20 3207 7800

FTI Consulting
Nick Hasell / Alex Le May/ Matthew O’Keeffe
www.fticonsulting.com
+44 (0)20 3727 1340

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