Freightways Acquires Medical Waste Company
Freightways Limited (Freightways) has diversified its presence in the Australian market with the purchase of the business and assets of State Waste Services (Australia) Pty Ltd and its related entities (collectively, SWS). SWS provides medical waste services in Sydney and surrounding regional areas. The acquisition will be effective from 1 September 2017.
SWS 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.
SWS provides Freightways’ wholly-owned subsidiary Shred-X Pty Ltd (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. Shred-X will leverage its national footprint of facilities, management expertise, internal resources and existing customer base to expand into the medical waste industry.
The purchase price for SWS includes an initial payment of A$6 million and a potential maximum earn-out payment of A$4 million, measured as at 30 June 2021 and based on incremental earnings performance.
It is expected that in its first 12 months of Freightways’ ownership, SWS will generate revenue of A$3 million and earnings (operating profit) before interest, tax, depreciation and amortisation (EBITDA) of A$1 million. Capital expenditure applicable to this acquisition in the next 12 months is expected to be approximately A$0.1 million. This acquisition is expected to be immediately EPS (earnings per share) positive.
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.
For further information please contact:
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