Tuesday 6th December 2011
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Freightways, the courier and data management company, has extended its foothold into information management, buying a Sydney-based file manager and archive storage company.
The express freight company will spend up to A$6.25 million over three years to acquire Filesaver in a deal that will add A$900,000 to Freightways’ earnings before interest, tax, depreciation and amortisation in its initial 12 months.
The company will pay A$4.4 million up front, with an earn-out of up to A$1.85 million payable in September 2014 if it meets performance targets.
Freightways plans to take Filesaver’s existing services in New South Wales and offer them across Australia using its existing information management division’s networks.
The purchase will be funded by Freightways’ existing debt facilities, which will lift the debt to debt and equity gearing ratio to about 52 percent. That’s up from 48.5 percent in October when Freightways announced its NZ$12.7 million acquisition of information management company Iron Mountain New Zealand, which was also funded by debt.
In August, Freightways renegotiated funding lines with its banking syndicate, with total facilities of NZ$110 million and A$70 million spread equally across three-year, four-year and five-year tranches. As at June 30, the company had total bank debt of $158.2 million, according to its annual report.
“This acquisition is consistent with Freightways’ growth strategy to acquire complementary businesses to increase its penetration in the information management industry and to increase its diversification both by industry sector and geography,” the company said in a statement. “Freightways’ information management division continues to deliver strong organic growth in both New Zealand and Australia.”
In October, Freightways reported a record first-quarter profit of $8 million, which it put down to its business model and brands. The information management segment boosted revenue 14 percent in the period, producing EBITDA growth of 5 percent.
Filesaver’s founder will stay with the business, which will operate as a stand-alone enterprise, though it will shift to Freightways’ Sydney premises.
The shares rose 0.3 percent to $3.40 in trading today, and have gained 6 percent this year.
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