Sharechat Logo

Mainfreight gets 8.2M euros to settle claim with former Wim Bosman owners

Monday 26th August 2013

Text too small?

Mainfreight will drop a compensation claim against the former owners of Wim Bosman in exchange for an 8.2 million euro payment after the European transport business lost a key customer shortly after being acquired in 2011.

Mainfreight has reached "an amicable agreement" to settle the dispute, it said in a statement today. The settlement comes two months after the Auckland-based transport and logistics group said it would mount a compensation claim over the loss of customer Giant Europe BV.

Mainfreight bought Wim Bosman in 2011 for 110 million euros plus earning-outs tied to earnings if targets were met. Under the terms of the settlement, the former owners have agreed they aren't entitled to any earn-outs under the 2011 deal, while making a payment to Mainfreight as an adjustment to the purchase price.

While the new business was expected to lift earnings, Mainfreight lost key trading accounts in its first 12 months of ownership while having to cope with poor trading conditions in the face of a European recession and bedding in the operations.

In the year ended March 31, sales revenue in Europe was little changed at 244.7 million euros while EBITDA tumbled 43 percent to 9.46 million euros. And in May, managing director Don Braid said he was "impatient" to fix Europe.

The agreement with the former owners will also see Mainfreight lease additional land adjoining its logistics operations in 's-Heerenberg, the Netherlands, which is itself on leased land. Mainfreight will pay an additional 200,000 euros a year between April 1, 2016, and March 31, 2021, and in return, the former owners have agreed not to build a planned new warehouse on the site.

"Mainfreight intends to continue to focus its efforts on positioning its European business for growth and improved profitability," Braid's statement said.

Its shares last traded at $10.29 and have declined about 13 percent this year. The stock is rated a 'buy' based on the consensus of six analysts surveyed by Reuters, with a median price target of $11.20.

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Mainfreight earnings lag last year's, Australian unit struggles as parcel business weighs
Mainfreight flags plans for claim against former Wim Bosman owner
Mainfreight’s Braid 'impatient' on fix for Europe after region's underperformance dents earnings
Mainfreight earnings growth stalls as European struggle offsets record sales
Mainfreight warns of softer second half, flat earnings
Mainfreight's Braid says KiwiRail ferry strike ‘disruptive’ in peak week
Mainfreight's first half profit drop by 4.6 percent; dividend unchanged
Mainfreight
Mainfreight 1Q profit falls 15% as Europe dents global sales
Mainfreight posts record FY profit on NZ, Australia units

IRG See IRG research reports