Freightways Acquires NOW Couriers
Freightways Limited (NZX: FRE) has agreed to purchase the business and assets of Momentum Management Limited (trading as NOW Couriers), with effect from 1 April.
Privately-owned NOW Couriers operates a package delivery business in the metropolitan Auckland market and provides a national overnight service through Freightways Castle Parcels and Post Haste brands.
According to Freightways Managing Director Dean Bracewell “NOW is a successful business which has operated in the Auckland market for many years.”
NOW Couriers has 40 contracted owner drivers who service greater Auckland. It prides itself on the high levels of service it is able to deliver to customers.
The purchase price of up to $11 million will be paid over two years. Initial payments totalling approximately $7.5 million will equate to 5 times EBIT for the year ending 31 March 2008. Two further payments with a maximum combined total of approximately $3.5 million will be made subject to performance in the years ending 31 March 2009 and 2010.
The NOW Couriers Managing Director and his team will remain in the business to continue its growth and development as a stand alone business alongside the other Freightways express package brands.
Mr Bracewell says the NOW Couriers acquisition is expected to be immediately earnings per share (EPS) positive.
Freightways, which operates in the express package, business mail and information management markets, has bought several businesses in the information management sector in Australia and New Zealand in recent years. Mr Bracewell says the acquisition of NOW Couriers is consistent with Freightways’ strategy to develop growth opportunities that complement its existing operations.
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