New Zealand express delivery group Freightways has announced that it is entering the Australian market with its $160 million acquisition of courier and express provider Allied Express.
Allied Express is one of the nation’s largest independently owned courier companies, with over 40 years in specialised logistics
According to Freightways, the new deal will open a new niche or third horizon of growth for the Kiwi company.
“This transaction gives us a successful model for enhancing our offering on both sides of the Tasman, leveraging Freightways’ core capabilities in express pick up, processing and delivery while creating a niche in oversized freight at the same time,” said Mark Troughear, CEO at Freightways.
Freightways made the announcement a week after reporting a $70.2 million profit for the previous financial year.
The NZ courier giant also said revenue growth has reached $873.1 million for FY2022, a 9 per cent increase year-on-year, with earnings before interest, taxes, and amortisation (EBITA) of $130.2 million, a 1 per cent increase year-on-year.
Troughear said despite challenges with frontline workforce numbers, supply chain and the labour market due to Covid-19, surges in demand and spikes in new customers following lockdowns provided a reasonable year-end result and increased the company’s market share overall.
“As with many other businesses, our frontline workforce was heavily impacted by Omicron and labour shortages with our teams affected by up to 30 per cent absenteeism through contracting the virus at times,” he said.
“Our customers were also affected, and it resulted in softer volumes in the 2nd half of the year.”
He continued that the impact was offset to a large extent by market share gains, surges in volume when restrictions lifted and tailwinds from businesses in their network.
With its latest acquisition, Freightways aims to broaden its geographical presence and range of services in the Australian market, where it already has some business activities.
“Allied Express has established a strong and highly competitive position in the Australian market over 40 years in specialised logistics,” Troughear said.
“Its ability to handle larger items sets it apart from others with a service that is highly desired by both SMEs and large corporates and has benefitted from the recent acceleration of eCommerce.”
The McDowell family (the shareholders of Allied Express) will become substantial shareholders in the enlarged Freightways group (with an approximately 6 per cent shareholding in Freightways on completion of the transaction).
Freightways said that the family will continue to work in the business to support growth plans and ensure continuity of personnel for all key stakeholders.
“We look forward to welcoming the Allied Express team to the Freightways family and leveraging each other’s experience and know-how,” Troughear concluded.
The transaction is expected to be completed on or after 30th September this year.
Source: Freightways media release. Content has been edited for length and style.