Freightways boss Dean Bracewell. Picture / Supplied
Freightways boss Dean Bracewell. Picture / Supplied
Freightways has snapped up Australian State Waste Services and its related entities, a group that provides medical waste services in Sydney and surrounding regional areas, for an initial payment of A$6 million (NZ$6.5m) and said it is expected to be immediately earnings per share positive.
The acquisition will be effectivefrom September 1 and the price also includes a potential maximum earn-out payment of A$4m, measured as at June 30, 2021 and based on incremental earnings performance, Freightways said in a statement.
In the first 12 months it is expected to generate revenue of A$3m and earnings before interest, tax, depreciation and amortisation of A$1m while capital expenditure over the next 12 months is expected to be about A$100,000, Freightways said.
The Australian waste company provides collection, treatment and disposal of medical waste, as well as ancillary services, including sanitary bin services, secure document destruction and total waste management solutions. It provides Freightways' wholly-owned subsidiary Shred-X with a new service offer. As a secure destruction company, Shred-X identified the medical waste industry as an attractive complementary market with growth opportunities, Freightways said.
"Freightways operates in the express package & business mail and information management markets. This acquisition is consistent with Freightways' strategy to develop growth opportunities that complement its existing capabilities," said managing director Dean Bracewell.
Earlier this week, Freightways, which delivers around 50 million items annually through brands like New Zealand Couriers and Post Haste Couriers, reported a 22 per cent lift in net profit to $60.9m in the year to June 30, while underlying profit before one-off items rose 4.1 per cent to $56.6m.
Freighways shares last traded up 0.4 per cent at $7.73 and have gained 17 per cent over the past 12 months.
