Freightways Makes Acquisitions in Australia and New Zealand

Freightways Limited (Freightways) today confirmed the acquisition of information management businesses on both sides of the Tasman, with the purchase of Shred-X Group (Shred-X) in Brisbane and MSS in Christchurch.

Shred-X is Queensland’s leading secure document destruction company, which has recently expanded into Victoria through acquisition, while MSS operates in the document storage niche. Both acquisitions take effect immediately.

The purchase price for Shred-X of up to A$8.7million will be made in two instalments in July and September after finalisation of the results for the year ended 30 June 2007. The resulting EBITDA increase for the full year to 30 June 2008 from Shred-X is expected to top A$1.4million.  MSS has been purchased for NZ$1million. Inclusive of synergies gained by merging MSS into Freightways’ established Archive Security business, incremental EBITDA of NZ$0.3 million is expected to be achieved in the 2008 financial year from MSS.

Freightways views Shred-X as a complementary business to its earlier acquisition in July 2006 of Databank Technologies Pty Ltd (New South Wales and Victoria), which was strengthened with the opening of DataBank, Queensland in January 2007.

“This latest acquisition is consistent with our growth strategy of increasing our penetration into the Australian information management market,” says Freightways’ Managing Director, Dean Bracewell.

“It means Freightways can now offer a complete package of information management services including document storage, data storage and document destruction to our Queensland customers. We plan to maintain the Shred-X brand and leverage its capabilities with those of DataBank and Archive Security.”

In addition, Freightways has entered into a 50/50 joint venture arrangement with the founders of Shred-X to develop a purpose-built document destruction facility in Yatala, Queensland in 2008. The cost to Freightways of this development is A$2.5million.

Mr Bracewell says Freightways had earlier signalled the information management market as a growth opportunity and it intends to continue to develop its presence on both sides of the Tasman.

Freightways operates in three distinct markets-the express package, information management and business mail markets. Both acquisitions are consistent with Freightways’ strategy to develop growth opportunities that complement its existing operations.