Freighter Group is pleased to announce that it has entered into an agreement to acquire Australasian Machinery Sales Pty Ltd (trading as Trout River Australia), a leading manufacturer and supplier of live bottom trailers in Australia.
The acquisition is a key step in Freighter Group ’s Growth in Existing Markets strategic initiative.
In FY18, Trout River Australia had approximately $10m in annual sales and an EBITDA of approximately $2m. The acquisition is expected to be earnings accretive in FY19 with returns anticipated to exceed Freighter Group ’s weighted average cost of capital in the first full year of ownership.
The acquisition of Trout River Australia will be completed in two tranches
80% for $5.9m in cash (subject to customary completion adjustments), expected to be completed shortly, and 20% by 30 June 2021 under an earn-out arrangement.
Following Freighter Group’s recent capital allocation review and the sale of MTC, the acquisition will be funded out of existing cash and debt facilities.
The acquisition is expected to provide a number of benefits to the Freighter Group, including
- The addition of live bottom trailers into Freighter Group’s comprehensive portfolio will add products with strong application in the infrastructure construction sector.
- Leveraging Freighter Group’s national dealer network will drive increased sales of Trout River Australia live bottom trailers.
- Improved production capacity and efficiency of the existing Trout River Australia business by leveraging Freighter Group’s facilities, procurement systems and engineering and manufacturing expertise.
- Improved after-sales customer service for Trout River Australia customers through the Freighter Group’s national parts network, MaxiPARTS, as well as Freighter Group’s national network of repair and service facilities.
Dean Jenkins, Managing Director and CEO of Freighter Group, said “We look forward to welcoming John Surwillo and Neil Lehman, the current owners of Trout River Australia, to the Freighter Group. John and Neil’s ongoing involvement in the business will facilitate a smooth transition and enable the Trout River Australia business to continue to benefit from their deep product knowledge.”
About Trout River Australia
Trout River Australia is based in Hallam, south-east Melbourne, and is a leading manufacturer and supplier of live bottom trailers in Australia.
Live bottom trailers reduce operator risk as the payload is discharged by a conveyor belt system in the trailer floor as opposed to a tipping trailer. Demand for live bottom trailers is expected to increase in bulk product markets due to the inherent health and safety benefits of their design and operation.
