Mainfreight sells Pan Orient Project Logistics and its 75% shareholding in LEP (New Zealand and Australia) for over A$83 million
Mainfreight Limited (Mainfreight) today confirmed that it had reached conditional agreement to sell its Pan Orient Project Logistics business and its 75% interest in LEP (New Zealand and Australia) to global logistics company Agility Group for A$83 million and subject to closing adjustments in relation to working capital. The purchase price will 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 are met. 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 Owens Group acquisition in 2003. It is the last of the non core Owens businesses to be sold. LEP is an Australasian-based freight forwarding business, owned 75% by Mainfreight and 25% by Agility. A significant proportion of the freight handled by LEP is sourced from the expanding Agility network and it became increasingly apparent that its logical owner was Agility. The funds released from the sale will be used by Mainfreight to fund its ongoing international expansion. Mainfreight is satisfied that this transaction fairly reflects the underlying value of both businesses and will provide ongoing employment and growth opportunities for the people employed. For technical reasons the sale is a related party transaction for the purposes of NZSX Listing Rule 9.2 and NZX Regulation has granted Mainfreight a waiver from the requirement to obtain shareholder approval under NZSX Listing Rule 9.2 in relation to the sale. NZX Regulation has made or will be making a separate announcement of that waiver decision. The sale is conditional on any necessary government approvals, consents being obtained under two joint venture arrangements, Mainfreight entering into a transitional services agreement to provide LEP and Pan Orient with ongoing transitional information technology and other services and administrative support and certain key employees remaining in employment with the business. The transaction will be completed on the business day before Mainfreight’s accounting cut off date in the month in which the conditions are satisfied. For further information, please contact Don Braid, Group Managing Director, telephone +64-9-259 5503, mobile +64-274 961 637 or email email@example.com.