Lossmaking Sheffield parcel firm sold for £15m
Sheffield parcel business Tuffnells has been sold in a £15m deal that saw its parent company offer to lend the buyer up to £10.5m due to the difficulties of securing finance during lockdown.
Connect Group has agreed to sell the lossmaking firm, based on Europa Close, Tinsley, to investors led by restructuring advisors Broad Oak Support Services.
Connect also agreed to provide a loan of up to £10.5m after the sale to support its turnaround and due to the difficulties of securing debt financing amid the coronavirus crisis.
Tuffnells, which specialises in large, heavy and bulky items, reported underlying losses of £14.1m in the year to August 31. Founded in Sheffield in 1914, today it operates from 36 depots, serves 4,000 businesses and delivers to 167 countries.
Gary Kennedy, group chairman at Connect Group, said: "After conducting a detailed strategic review, we have concluded that the sale of Tuffnells is the right option for the group and in the best interests of all stakeholders.
"Despite the trading difficulties in recent years, Tuffnells remains a leading player in its specialist field with every opportunity to thrive under new and committed ownership. Within the group, its disposal will remove the distraction from our strong and profitable news and magazines distribution business, enabling further efficiencies as the group resizes its central functions.
"Looking ahead, we remain focused on strengthening the group's balance sheet, while deploying our surplus free cash flow capital to deliver a reduction in net debt and maintaining attractive total shareholder returns."