Parcel deliverer Evri to take on Royal Mail after £2.7bn takeover by US fund

Royal Mail is facing an assault from one of the world’s biggest buyout funds as Apollo announced a £2.7bn deal to buy the British parcel company Evri.

The US investment firm said it will inject fresh funding to grow Evri’s parcel business after outbidding rival suitors in an auction for the delivery group.

Alex van Hoek, a partner at Apollo, said it would “support and invest in Evri’s continued success and expansion” as its new owner.

He added: “We are excited to leverage our capital and experience in logistics and transportation to serve as value-add partners in this next phase.”

The Apollo backing is expected to hand Evri fresh firepower to take on Royal Mail.

The UK postal service has signalled it wants to grow its parcel business, having ceded ground to rivals including DPD, Evri and InPost in recent years. The majority of Royal Mail’s revenues come from parcels, while its letters division has been in decline.

Earlier this month, The Telegraph revealed that Czech tycoon Daniel Kretinsky, who is buying Royal Mail owner International Distribution Services (IDS), was preparing to spend £800m over the next three to five years to create a new parcels powerhouse. The investment will go toward deploying a network of 20,000 Amazon-style lockers as well as slashing parcel prices to undercut rivals.

Mr Kretinsky’s EP Group has tabled a £3.6bn offer for IDS, which also owns the European parcels company GLS. Mr Kretinsky also has a significant stake in Dutch operator PostNL. The deal for the UK postal service, which would be the first time it has passed into private hands, is being investigated by the Government on national security grounds.

Apollo and Evri expect the deal to complete later this year. The announcement comes after weeks of speculation over the future of Evri.

Advent International, another American buyout fund, put the company up for sale earlier this year. The auction has attracted a series of suitors including rival delivery company DHL and the Chinese internet giant JD.com.

While neither side revealed financial terms of the deal, it is thought to have been worth £2.7bn. Advent had paid around €1bn (£840m) for the majority stake in Evri and a minority stake in German group Otto in 2020.

Martijn de Lange, the Evri chief executive, said Advent had “provided the business with a strong foundation for continued expansion”.

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