KEY POINTS:
Transport group Mainfreight has reached a conditional agreement to sell Pan Orient Project Logistics and its 75 per cent shareholding in LEP (New Zealand and Australia) for over A$83 million ($94.9 million).
The sale, to global logistics company Agility Group, is subject to closing adjustments in relation to working capital.
Pan Orient is an Australian-based business specialising in the supply of logistics services to large projects in Australia and Papua New Guinea, in particular within the mining sector.
It was acquired by Mainfreight as part of the acquisition of Owens Group in 2003, and Mainfreight said it was the last of the non-core Owens businesses to be sold.
LEP is an Australasian-based freight forwarding business, owned 75 per cent by Mainfreight and 25 per cent by Agility.
Mainfreight said a significant proportion of the freight handled by LEP was sourced from the expanding Agility network and it became increasingly apparent that Agility was its logical owner.
The funds released from the sale would be used by Mainfreight to fund its ongoing international expansion, Mainfreight said.
The purchase price would be paid in full on completion of the sale with A$1.5 million to be held subject to an escrow arrangement and payable in instalments if certain project contract targets were met.
Mainfreight shares were up 5c to $7.35 in late-morning trade today, having ranged between $8.15 and $4.60 in the past year.
- NZPA
