Freight company conquers Mountain

Freightways Limited's chief executive Dean Bracewell. Photo / Martin Sykes

Freightways chief executive Dean Bracewell says an information management firm the listed company has purchased has gone through a restructuring and is now a profitable business.

The Auckland-based courier and data management firm announced yesterday it had acquired Iron Mountain New Zealand, a subsidiary of New York-listed Iron Mountain, for $12.7 million.

Iron Mountain provides records management, data protection and information destruction services, according to its website.

Iron Mountain New Zealand posted a loss of $3.2 million in the year ended December 31, according to financial statements lodged with the Companies Office.

But Bracewell said the company had gone through a big restructuring process, including relocating their operations into a consolidated facility, which would affect the figures.

"There's relocation costs and all sorts of things that would go into those historical numbers," he said.

The company said that it expected revenue of $12 million, with earnings before interest, tax, depreciation and amortisation (ebitda) of $1.5 million, from the newly acquired business during its first full year under Freightways' ownership.

The acquisition, which was to be fully debt funded from existing finance facilities, was expected to be immediately earnings per share positive, Freightways said.

The company said it would merge the new business into its Online Security Services subsidiary.

Bracewell said there were strong potential benefits from merging the business, which had around 1500 customers, with Freightways' existing operations.

Freightways said the acquisition of Iron Mountain was consistent with its growth strategy to acquire complementary businesses and increase its penetration into the information management market.

Following the acquisition the company's debt to debt and equity ratio was expected to be approximately 48.5 per cent.

Freightways increased its underlying profit 7 per cent in the 12 months ended June, and net profit climbed by almost a third to $29.9 million.

This, however, was distorted by lower tax charges and one-off charges resulting from the Christchurch earthquake.

Shares closed up 6c at $3.26 last night.

- Additional reporting: BusinessDesk