Post Office rival Parcel2Go delivers stake to Mayfair

3 December 2019, 17:21 | Updated: 3 December 2019, 18:00

Britain's biggest independent price comparison platform for parcel delivery services is in advanced talks to sell a stake to the private equity backer of Ovo Energy and Yo!, the sushi chain.

Sky News understands that Mayfair Equity Partners is close to announcing the purchase of a substantial shareholding in Parcel2Go, which was set up in the late 1990s.

Sources said that a deal, the terms of which were unclear on Tuesday, could be announced later this week.

The transaction will underline continuing private equity interest in price comparison platforms, following the takeover of uSwitch owner ZPG by SilverLake, the buyout firm, last year.

Mayfair's founders led the acquisition and lucrative subsequent sale of uSwitch during their time at LDC, the private equity investment division of Lloyds Banking Group.

As well as its core online business, Parcel2Go provides white-label shipping services to parcel carriers and has a smaller third leg called National Pallets.

Based in Bolton, Lancashire, Parcel2Go employs about 230 people.

The company positions itself as an attractive alternative to the Post Office, which is publicly owned and is overseen by UK Government Investments, a unit which sits within the Treasury.

Parcel2Go promises customers savings in excess of 50% on delivery services and argues that by providing cheaper and more efficient alternatives for micro-businesses, small retailers and consumers, It is disrupting a large and under-penetrated market.

Run by former DX Group chief executive James Greenbury, its executive chairman, the company recorded revenues of more than £100m in its most recent financial year.

One source close to the deal with Mayfair said that Parcel2Go had consistently increased annual sales by more than 20% and was expected to continue to grow at this rate "for the foreseeable future".

The UK parcels market is the fastest-growing in Europe, with 2.4bn parcels sent last year, driven partly by the explosion in internet shopping.

Roughly 15% of that volume falls within Parcel2Go's target market, equating to about £2bn in terms of value.

In its white-label division, Parcel2Go runs websites for prominent courier services such as Hermes, FedEx/TNT and Parcelforce, which is owned by Royal Mail Group.

Mayfair Equity's purchase of a stake in Parcel2Go is being made from its £650m second buyout fund, which it closed in January.

The investment firm, which was established in 2014, has bought stakes in companies including Ovo and Yo!, and earlier this year announced its first exit with the sale of Fox International, the fishing equipment manufacturer.

A spokesman for Mayfair declined to comment on Tuesday.