Where’s the post?
Unusually, Mailroom Management Services (MMS) was founded as a start-up within a moderately successful existing Graphite investment. The original investment in Security Despatch, a courier business, was successfully sold and MMS spun out as a stand-alone business.
MMS became one of the leading dedicated providers of postroom management and other related services in the UK. The business was founded in the early 1990s to capitalise on the opportunity to grow a successful operation in business services outsourcing. Most postrooms were inefficiently run as internal operations of corporates and material savings could be made by outsourcing them.
MMS was established using the skills and experience of a team we knew well from our investment in the parent company, Security Despatch. Its launch coincided with a trend towards outsourcing non-core functions by many large companies. Using contacts developed by Security Despatch, the business was able to grow its customer base rapidly from a standing start.
Under Graphite's ownership, MMS:
- was successfully established as a stand-alone entity outside of Security Despatch
- developed a leading market position in the outsourced operation of UK postrooms
- became highly profitable and cash generative
- grew turnover from zero to £23 million by 2002
In 2002 Mailroom Management Services was sold to the Swiss Post Office, generating a multiple of 8.6 times cost and an IRR of 65 per cent.
