Gatemore supports offer from HIG for DX Group

Gatemore Capital Management LLP

12 September 2023

 

12 September 2023

Gatemore supports offer from H.I.G. for DX Group

Gatemore Capital Management LLP ("Gatemore"), a fund manager controlling (directly or via CFD)  19%[1] of the outstanding shares in DX (Group) plc ("the Company" or "DX") confirms its support for the non-binding and conditional proposal from H.I.G. European Capital Partners LLP ("H.I.G.") regarding a possible all cash offer for the Company at a price of 48.5 pence per share (the "Proposal").  As has been announced by H.I.G., Gatemore has signed a Letter of Intent to support the proposal which remains in effect.

Gatemore has been the largest shareholder in DX since 2017 when it led the rescue of the Company with a £24 million convertible note financing, saving over 3,000 jobs[2]. This followed a public campaign by Gatemore to replace the Board of Directors, which ended with the appointment of Lloyd Dunn as CEO and three other independent board members. Under this new leadership, the Company achieved a remarkable turnaround whereby DX transformed into the market leader in irregular dimension and weight (IDW) freight[3] and moved from losing over £10 million in EBIT per year[4] to making over £30 million in EBIT per year[5].  Revenues continue to grow at double digit rates, with healthy operating profits and a strong net cash position[6].

Liad Meidar, Managing Partner at Gatemore Capital Management commented:

"As has been announced, we are supportive of the possible offer for DX by H.I.G., which is a testament to the exceptional turnaround that DX has experienced since we invested in the business. We believe H.I.G. is a credible backer for this company, which has built a market-leading position in the UK and continues to deliver strong growth, going from strength to strength."

About Gatemore Capital Management

Based in London, Gatemore Capital Management is an independent investment firm managing a turnaround and activist strategy focused on highly concentrated positions in listed and privately held companies across consumer, industrial, media, and technology sectors.

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[1] 101,503,538 shares in addition to 13,250,000 CFDs.

[2] Source: DX 2017 Annual Report.

[3] Source: DX Interim Results Presentation slide 9, 27-Feb-23.

[4] FY18 actual EBIT.  Source: S&P CapitalIQ.

[5] FY23 market consensus EBIT.  Source: S&P CapitalIQ as at 11-Sept-23.

[6] Source: DX Trading Update, 18-Jul-23. 

 

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