American Advent International bought two-third of British Hermes in $1.3B deal

One of the largest equity investors Advent International (“Advent”) is taking a 25 percent shareholding in Hermes Germany and 75 percent in Hermes UK, Otto Group released the news on Monday. 

As already announced in May, Otto Group, the owner of Hermes companies, had been looking for a strategic partner. Industry talks were mentioning FedEx as a potential buyer but Otto’s announcement on Monday revealed the real investor: Advent International. Advent International is one of the largest and most experienced global private equity investors. The firm founded in the USA has invested in over 350 private equity transactions in 41 countries, and as of March 31, 2020, had €44 billion in assets under management.

In the current financial year, both Hermes UK and Hermes Germany have been recording high volume growth against the COVID-19 pandemic backdrop, according to the Otto Group’s statement. In response to this and in expectation of continued growth in the parcel delivery sector, Hermes is further expanding its staff capacity. In July, as the Guardian reported, the parcel delivery company was looking for 9000 new couriers as self-employed subcontractors and 1500 full-time employees in various positions “to cope with the shift to home shopping during the coronavirus pandemic”.

Following this transaction, the Otto Group retains the majority of shares in Hermes Germany, and its core German market. In the UK, the Otto Group is relinquishing its majority shareholding in Hermes UK, while retaining representation in major strategic decisions. The operational management of both companies will continue with their respective management teams.