Lindsay Australia enters Tasmanian transport market with $108.2m acquisition of SRT Logistics
Lindsay Australia (ASX: LAU) will enter the Tasmanian market with the $108.2 million acquisition of local transport firm SRT Logistics.
The company anticipates the acquisition will create end-to-end opportunities for customers seeking a full suite of road, rail and sea refrigerated logistics solutions.
It will diversify the company’s operating base by state and customer type, consolidate its market position and increase its earnings resilience.
New revenue stream
Lindsay chief executive officer Clay McDonald said the transaction would provide a new revenue stream through entry into the Tasmanian road freight and trans-Bass Strait shipping markets.
“SRT is a quality business that has created a strong position in a market with positive growth characteristics and this acquisition will be a transformative event through the creation of a truly national service offering for our customers,” he said.
“SRT and Lindsay demonstrate strong operational and cultural alignment and the combination of both businesses will create opportunities for growth, synergy realisation and competitive advantage.”
Family-owned company
Founded in 1996, SRT Logistics is Tasmania’s largest provider of refrigerated supply chain solutions, servicing the inbound and outbound horticultural, wholesale and retail food industries.
The family-owned company runs a 24-hour operation that generates the majority of its revenue from on-island transport and distribution services from Tasmania to mainland Australia across Bass Strait.
SRT operates four distribution centres and two satellite locations across Tasmania, Victoria, New South Wales and Queensland and has a blue-chip customer base comprised of leading food manufacturers, producers and retailers.
It is forecast to achieve EBIT of $14.6m for the year ending June 2025.
Natural progression
SRT chief executive officer (and majority shareholder) Robert Miller said the proposed acquisition was a natural progression for SRT.
“Integrating with Lindsay’s network represents a logical and highly compelling next step in our commercial evolution,” he said.
“At last, Tasmanian producers will benefit from a locally based logistics operator with a fully integrated road, rail and sea network and nationwide reach.”
Terms of the deal
Consideration for the deal will comprise the issue of 46.5 million Lindsay shares – priced at $0.65 each and valued at approximately $30.2m, giving SRT 12.8% equity – and a $57.2m cash payment following the assumption of SRT’s debt.
On completion, SRT will become a wholly-owned subsidiary of Lindsay and both Mr Miller and chief operating officer Brad Hilder will remain with the company.
Mr Miller will be appointed to Lindsay’s board as an executive director.