Qube expands its diversification and growth strategy with two new acquisitions

Qube Holdings has acquired a 50% share in the New Zealand shipping company Pinnacle Corporation and has fully purchased specialist bulk logistics provider Kalari Proprietary, diversifying Qube’s global presence and enhancing its local operations. 

By collectively investing $145 million in both deals, Qube Holdings will enter the container logistics market in New Zealand for the first time and increase its involvement in Queensland and South Australia. 

Pinnacle Corporation, which provides container storage and handling, refrigerated container maintenance, transport services and warehousing around the world, operates in nine locations throughout New Zealand under its wholly-owned brands, Specialised Group and MetroBox. 

Qube Managing Director Paul Digney said the transaction will provide Qube with a unique opportunity to gain initial exposure to the New Zealand container logistics market, with significant longer-term organic growth opportunities.  

“I am very pleased that Qube has acquired a 50 per cent share in this very well-regarded and established player in New Zealand’s freight and logistics sector, with a high-performing and quality workforce,” he said.  

“This joint venture is consistent with our strategy for growth and geographic diversification within Qube’s core strategic focus and builds on Qube’s existing port logistics presence throughout New Zealand, under the ISO brand.

Pinnacle Managing Director Grant Tregurtha said the joint venture is a significant and exciting opportunity that will result in a strong and dynamic presence in the New Zealand market. 

“The combination of strengths from both companies will better serve customers, promote innovation and provide greater opportunities for future growth and expansion,” he said. 

“We look forward to the future and the many possibilities this will bring.” 

Qube’s acquisition of Kalari Proprietary Limited from Swire Investments (Australia) Ltd is expected to provide synergies with Qube’s existing bulk mine-to-market and mine resupply operations. It will also provide an opportunity for Qube to strengthen the Kalari offering through its rail and port infrastructure. 

The deal is expected to be worth around AUD 145 million and will be funded through Qube’s existing undrawn debt facilities in Australia and New Zealand. 

Kalari, whose fleet is composed of predominantly performance-based standards vehicles and offers materials handling and supply chain optimisation services, currently services a range of Tier 1 customers with significant mining operations, primarily across Queensland and South Australia.  

Digney states the acquisition is a natural fit for the company and provides an excellent opportunity to expand Qube’s inbound mine resupply services, opening new markets and regions, including those focused on critical minerals.  

“Kalari is a natural fit for our business, providing us with an excellent opportunity to expand our inbound mine resupply services, and opening new markets and regions for Qube, including in future focused critical minerals,” he said.  

“For over 45 years, Kalari has established and maintained a strong customer base and built a high performing team with a strong culture and similar values to Qube. I am delighted to welcome this trusted and respected team in the mining services industry to the Qube family.” 

Kalari Managing Director Peter O’Shannessy said he was confident Kalari’s track record of success would continue under Qube’s ownership.  

“I am very pleased for our people and our customers that we’ve been able to reach an agreement for Qube to acquire Kalari and I am confident that the business will make a significant contribution to the ongoing success of Qube,” he said. 

The initial focus will be to work with Kalari’s management team to ensure the same high level of service continues for the company’s valued customers and to progress to new opportunities.  

The acquisitions are expected to meet Qube’s financial hurdles, delivering a Return on Average Capital Employed (ROACE) of at least 10.0% and being Earnings Per Share Pre-Amortisation (EPSA) accretive, in each case on a full-year underlying basis.