Freightways acquires Iron Mountain New Zealand

3 October 2011

Freightways Limited (FRE) announces that it has agreed to purchase Iron Mountain New Zealand Limited (IMNZ), a subsidiary of Iron Mountain Incorporated, effective from 1 October 2011.

IMNZ, which operates in New Zealand’s information management market, will be merged operationally with FRE subsidiary, Online Security Services Limited (OSS).

The purchase price paid for IMNZ is $12.7 million (US$10 million). Forecast revenue of $12 million and EBITDA of $1.5 million, exclusive of any synergy benefits, is expected to be generated in the first full year of FRE ownership. Capital expenditure related to this acquisition to enable the merger of its operations with those of OSS and to provide capacity for growth is expected to be $1 million. This acquisition will be fully debt funded from headroom available in FRE’s existing finance facilities. This acquisition is expected to be immediately earnings per share (EPS) positive. Following this acquisition, FRE’s Debt to Debt & Equity gearing ratio will be approximately 48.5%.

This acquisition is consistent with FRE’s growth strategy to acquire complementary businesses and to increase its penetration in the Information Management market. As well as operating in New Zealand, FRE has established operations in every major state in Australia, enabling it to provide customers with a full suite of information management services on both sides of the Tasman. FRE’s information management division has proven to be resilient during recent economic cycles and has continued to deliver strong organic growth in both New Zealand and Australia.

ENDS

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