New Zealand express delivery group Freightways is expanding in Australia with the A$160m (US$110m) acquisition of courier and express freight provider Allied Express.
Allied Express provides delivery services through a network of leased depots in Australian cities. It expects revenues of A$215m (US$148m) and operating profits (EBITA) of A$20.5m (US$14.1m) in the 2022-2023 financial year. The deal is intended to broaden Freightways’ geographical presence and range of services in its neighboring market, where it already has some business activities. Freightways stated that the acquisition, expected to be completed on or after September 30, 2022, sets the platform for future growth as it marks an entry point to the Australian market and a niche activity.
Freightways will pay the current owners, the McDowell family, A$160m (US$110m) for 100% of the shares in Allied Express. This will be funded by a A$100m (US$691m) Freightways share issuance to the McDowell family, who will thus become substantial shareholders in the enlarged Freightways group (with an approximate 6% shareholding), along with A$60m (US$41m) in cash.
Mark Troughear, CEO of Freightways, said, “This transaction gives us a successful model for enhancing our offering on both sides of the Tasman, leveraging Freightways’ core capabilities in express pickup, processing and delivery while creating a niche in oversized freight at the same time. Allied Express has established a strong and highly competitive position in the Australian market over 40 years in specialized logistics. Its ability to handle larger items sets it apart from others with a service that is highly desired by both SMEs and large corporates and has benefitted from the recent acceleration of e-commerce.”
