Postal group Royal Mail (RMG) is shelling out $90m, or about £70m, to buy Golden State Overnight Delivery Service (GSO) on a debt-free, cash-free basis. Struck through its Amsterdam-based subsidiary General Logistics Systems, shares in the UK postal group nudge 1.7% higher to 499.9p, although given the strength of the wider market on Tuesday, that's hardly a ringing endorsement.
GSO offers regional next day delivery services, mainly in California, and priority ground and freight shipping to a range of customers, which the UK company hopes to piggy back to expand its own global reach.
According to Royal Mail analysis, GSO’s area of operation is worth about as much as the UK's national GDP yet is growing faster than the either Britain or continental Europe.
GSO has a hub and spoke network featuring 36 facilities and approximately 1,900 employees.
GLS CEO Rico Back says: ‘GSO operates in an attractive regional market representing the world’s fifth largest economy, and provides GLS with an opportunity to grow GSO within its existing footprint. ‘
In the year 31 March, GSO generated revenue of $114m. It will be fully consolidated within GLS for reporting purposes, but will be managed as a separate entity.