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Parcel2Go owner lines up bankers to oversee company auction

Parcel2Go owner lines

A rise in online sales during the coronavirus pandemic has prompted Mayfair Equity Partners, the owner of Parcel2Go, to line up bankers to oversee an auction of the company just a year after buying it.

The firm, which also owns stakes in Ovo Energy and Yo! Sushi, is to keep part of its stake in the price comparison business, according to reports, with Drake Star Partners expected to advise on an auction of part of its majority shareholding.

The management team at Parcel2Go and Mayfair are likely to retain part of their stake after any deal, Sky News revealed, citing insiders.

The independent price comparison platform is one of the biggest in Britain and saw an increase in revenues of more than 50% since the first UK lockdown in March.

Online shopping has surged in recent months as people across the UK stay indoors to prevent the spread of coronavirus.

During the country’s first lockdown, 71% of UK consumers received between one and three online shopping orders delivered to their homes each week, while 12% had as many as four to six parcels delivered every week.

Some 5% had as many as seven to 15 packages delivered weekly during lockdown.

Parcel2Go, based in Greater Manchester, offers customers and small eBay (EBAY) sellers and businesses a cheap alternative to the Post Office – which is publicly owned and is overseen by UK Government Investments. Its site enables people to send small packages and large parcels across the UK and internationally.

Parcel2Go is led by former DX Group chief executive James Greenbury. It posted revenues of more than £100m in its most recent financial year.

News of the auction comes after Royal Mail (RMG.L) last month announced a £20m ($26.9m) group operating loss in the first half of 2020, but said parcel deliveries are key to its future as they outstripped letter revenue for the first time in the company’s history.

Parcel revenue now represents 60% of the company’s total revenue, compared with 47% in the prior period. The British postal firm also earlier revealed that it would start picking up parcels from people’s homes as online shopping continues to boom.

It is aiming to capitalise on the rising trend by charging 72p per parcel collection on top of standard postage costs.

Pre-paid return packages will be charged at 60p per item and it will collect up to five parcels per address, subject to limits of 61cm x 46cm x 46cm in volume and 20kg in weight.

The Parcel Collect service, which will rival the likes of DHL, Hermes and DPD, has been trialled in the west of England and will be available every day except Sunday.

Royal Mail said at the time that it was “one of the biggest changes to the daily delivery since the launch of the post box in 1852.”

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