Freightways chief executive Mark Troughear. Photo: Supplied
Logistics company Freightways is expanding in Australia after agreeing to buy Melbourne-based VT Freight Express for A$71 million (NZ$81.4m).
VT Freight Express (VTFE) provides express delivery of parcels and palletised freight specialising in the business market, notably the building, healthcare, retail and plumbing sectors.
Freightways said the acquisition would fit with its existing Allied Express business in Australia which operates in the consumer delivery sector. It expects the acquisition to bring savings between both businesses.
"The VTFE business operates an asset light model using a contractor fleet and leased facilities, which is similar to Allied Express and other Freightways businesses."
Freightways will fund the acquisition through existing and new bank borrowing, and the transaction is expected to be settled early next year.
VTFE had annual revenues of A$77 million in the year-ended October, and Freightways expects the acquisition to increase earnings-per-share by 6 percent in its first year.
Freightways said the acquisition was part of its strategy to expand into business services in Australia, bringing efficiencies with its existing Allied Express business and Freightways' own core capabilities of express pick up, processing and delivery.
Freightways will operate VTFE as a separate brand, maintaining its own leadership and sharing resources with its parent where possible.
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