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Home / Business / Markets

NZ's Mondiale ponders IPO after Aussie freight merger

Jamie Gray
By Jamie Gray
Business Reporter·NZ Herald·
5 Mar, 2021 04:00 PM3 mins to read

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NZ freight forwarder Mondiale is merging with Australia's VISA Global Logistics. Photo / NZ Herald

NZ freight forwarder Mondiale is merging with Australia's VISA Global Logistics. Photo / NZ Herald

An initial public offer and sharemarket listing is on the radar screen for New Zealand forwarder Mondiale, which is merging with Australia's Visa Global Logistics.

The combined entity - part owned by private equity company Direct Capital - will become a top-30 freight forwarder in the same league as NZX-listed Mainfreight, which is rated by TransportTopics as the 33rd biggest by volume.

Mondiale said the merged group would handle 500,000 20-foot equivalent (TEU) containers in Australia and New Zealand, making it the biggest privately owned freight forwarder in Oceania.

The Mondiale-Visa tie-up is taking place amid increased merger and acquisition activity in freight forwarding worldwide.

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Mondiale is New Zealand's second largest wharf transport operator and Visa is in the top three in Australia.

"At some stage down the track an IPO will definitely be considered," Mondiale's chief executive Ray Meade, who will head up the merged group, said.

"No fixed timeframe has been set," he told the Herald.

"The goal at this stage is to integrate the company with Visa," he said.

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"We have got a lot of things to do and those synergies between the two need to be delivered."

Mondiale - New Zealand's largest privately-owned logistics provider - and VISA will have combined revenue of $1.3 billion.

Meade said that despite disruption in global shipping and supply chains, there had been a big increase in volumes to deal with, which had lifted the profitability of the shipping companies.

Maersk - the world biggest shipping company - last month reported an 85 per cent increase in its operating earnings in the fourth quarter compared with the same quarter a year earlier.

"Our revenue has increased substantially as has the number of shipments that we handle," Meade said.

"The challenges that we face are good challenges although they are not ideal," he said.

The merger comes at a time of dramatically curtailed air freight and a big lift in private consumption around the world, which has led to a lift in container volume.

Both entities have offices in Australia and New Zealand.

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Meade said that when Mondiale's owners looked at how to make the company bigger, Aussie was seen as the logical solution.

Mondiale's owners sold half the company to Direct Capital and ACC last year.

Post merger, Visa and Mondiale executives together will hold 62 per cent and the balance will be held by Direct Capital and ACC.

Mondiale is New Zealand's second largest wharf transport operator and Visa is in the top three in Australia.

"We work in a sector where scale is increasingly important," Meade said.

Mondiale and Visa combined employ more than 1500 people globally with operations across New Zealand, Australia, North Asia, Southeast Asia, the Indian sub-continent and Europe.

Both companies have made significant investments in wharf transport in New Zealand and Australia.

The founding seven executive shareholders of Mondiale and Visa will remain with the company as shareholders in their executive positions.

Mondiale was founded in 1989 by John Sargent, Phil Bramwell and Grant Ryder.

Freight forwarding companies handle logistics including ocean-freight, air-freight, customs, wharf transport and warehousing.

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