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Another courier business has joined Freightways' fleet of delivery companies.
The company said yesterday it had agreed to acquire Momentum Management, which trades as NOW Couriers, with effect from April 1.
Freightways managing director Dean Bracewell said it had formed an alliance with the company three years ago when the privately-owned delivery business started putting national packages through Freightways' network.
The two parties began buy-out talks six months ago.
The purchase price of up to $11 million will be paid over two years.
Initial payments totalling about $7.5 million will equate to five times earnings before interest and tax for the year ending March 31.
Two more payments with a maximum combined total of about $3.5 million will be made subject to performance in the years ending March 31, 2009, and 2010.
Bracewell said the acquisition was expected to be immediately earnings per share positive.
There were no plans to merge it with Freightways' existing businesses, which include New Zealand Couriers, Post Haste Couriers, Castle Parcels, SUB60, Security Express and Kiwi Express.
"It focuses on its own particular niche - the local Auckland metropolitan market - and our existing businesses have more of a national focus," said Bracewell.
"We've watched the business grow and develop and we really want to support that growth and development, we'd like to see it stand alone and continue on its own path. We're used to running multiple brands."
There were no concerns over the new acquisition cannibalising the other.
"It's a different niche than the other businesses."
NOW has 40 contracted owner drivers servicing greater Auckland. Its managing director and team will remain in the business.Freightways shares rose 11c to $3.06 yesterday.
