Freightways' latest purchases on both sides of the Tasman complement other acquisitions which include mail and data operations. Photo / Glenn Jeffrey
Freightways won't rule out further acquisitions after boosting its information management operations on both sides of the Tasman.
The NZX-listed company yesterday bought Queensland-based document destruction business Shred-X Group for up to A$8.7 million.
Managing director Dean Bracewell said the purchase would complement other operations.
Freightways bought data
storage business DataBank last year with operations in New South Wales and Victoria and opened a Queensland branch in January with capacity for both data and documents.
"So it gives us the third piece of the jigsaw," Bracewell said.
The up to A$8.7 million price would be paid over two instalments in July and September after full-year results were finalised.
Further purchases were not ruled out for any part of the company, which included business mail.
"We're certainly always looking at acquisition opportunities," Bracewell said. "Our growth strategy is both designed around growing the organic business but also looking at acquisitions."
Document storage business MSS Christchurch was also bought yesterday, for $1 million, which when including synergies from a merger with Freightways' Archive Security business, was expected to add $300,000 to trading profit next financial year.
Privacy legislation in Australia was driving growth in information management with firms above a certain size required to securely destroy personal data, Bracewell said.
The Australian market was worth about A$80 million but had the potential to be more than A$200 million a year, he added.
Shred-X was expected to increase Freightways trading profit by more than A$1.4 million in the year ending next June.
"Information management, it's a small part of Freightways but it's a very strongly performing part of the company," Bracewell said.
The founders of Shred-X would stay with the business and an undisclosed incentive based on future earnings would be paid in 2011.
Freightways has also formed an equal joint venture with the founders to buy land and develop a purpose-built facility into which Shred-X's Queensland operations would be consolidated.
Freightways' shares closed up 7c yesterday at $4.
