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Freightways said today it had agreed to buy Momentum Management, trading as Now Couriers, for $7.5 million plus a buyout of up to $3.5m over two years.
Now operates a package delivery business in the metropolitan Auckland market and provides a national service via Freightways' Castle Parcels and Post Haste brands.
The purchase price will be paid over two years. Initial payments will equate to five times earnings before interest and tax for the year ending March 31.
The deal will be effective from April 1.
The buyout package involves two further payments with a maximum combined total of $3.5m and will be subject to performance in the years ending March 31, 2009 and 2010.
Now, will continue to operate as a stand alone business. Its management have agreed to remain.
Freightways shares rose 9 cents to $3.04 on the news. They have traded between $4.59 and $2.87 in the last year.
- NZPA
