Freightways buys Oz firm

Dean Bracewell is head of Freightways, which is on track to lift earnings.

Freightways, the listed courier and data management company, will spend up to A$30 million ($32.5 million) on Australian information management firm LitSupport.

The Auckland-based company paid A$17.1 million and will add potential earnouts of up to A$12.1 million based on LitSupport's 2017 performance, in a deal that's expected to generate A$17 million of annual revenue and A$3.8 million in operating profit, Freightways said.

The acquisition beefs up Freightways' offering to include electronic and physical evidence management services to the legal industry in Sydney, Melbourne, Brisbane and Perth, and will immediately add to earnings per share, it said.

"LitSupport's suite of services complements those of TIMG (The Information Management Group) and positions TIMG higher on the service chain of the legal industry, in particular, but also for government and corporate Australia.

"This acquisition is consistent with Freightways' strategy to develop growth opportunities that complement its existing capabilities."

The company, whose businesses include New Zealand Couriers, Post Haste Couriers and DX Mail, has been expanding its information management interests, buying document management companies Docushred and Document Destruction Services, as well as Advance Security Destruction Services and Document & Data Storage Management in Australia.

In October, Freightways said it was on track to lift 2015 earnings after reporting a 17 per cent increase in first-quarter sales, driven by increased demand and a bigger market share from its courier business.

Its information management division recorded a 14 per cent increase in sales to $28.8 million and a 23 per cent gain in earnings before interest, tax, depreciation and amortisation to $5.9 million. The ebita margin widened to 20.5 per cent from 19.1 per cent.

The company's shares closed up 26c yesterday at $5.96.

- BusinessDesk