Royal Mail seals a £213m deal for Canadian parcel firm Dicom

Royal Mail has bought up the Canadian business of parcel delivery firm Dicom for C$360m (£213.4m) through its international arm General Logistics Systems (GLS), taking the British postal service across the Atlantic.

The group said the deal, which will be funded through existing borrowing facilities, is expected to start bringing in earnings and cash flow for Royal Mail before the end of its current financial year in March 2019.

Dicom, which primarily provides business-to-business ground delivery services, was previously owned by US private equity firm Wind Point Partners. Royal Mail will gain a network of 28 depots and carrier partnerships across Canada as part of the transaction.

"This acquisition is in line with GLS’ strategy to grow through targeted and focused acquisitions to capture higher growth segments outside Europe," said Royal Mail boss Rico Back, who was formerly the head of GLS.

Described as a "growth engine" for the group, the international GLS accounted for 33 per cent of Royal Mail's adjusted operating profit after transformation costs in 2017-18, while the UK business' revenue growth was flat.

The deal follows Royal Mail's acquisition of US postal service Postal Express for $13.3m (£10.3m) in 2017, and Californian delivery firm Golden State Overnight for $90m in 2016.

Royal Mail's share price rose 0.71 per cent on the news to £4.51.