Upon completion of the deal, SingPost's revenue in Australia would exceed $1 billion
Singapore Post, via its Australia-based subsidiary Freight Management Holdings (FMH), is spending up to A$210 million ($183 million) to buy Border Express, to further expand its presence Down Under and bring its revenue in this market to more than $1 billion.
Border Express, described as the sixth largest national transport and distribution services company in Australia, has a presence across every state and territory in Australia with comprehensive freight connectivity, warehouses and regional centres, providing end-to-end interstate logistics services.
Border Express runs a network of 16 facilities, a fleet of over 700 vehicles, and has a headcount of around 1,300 serving over 3,000 clients.
For its financial year ended July 2, Border Express reported earnings of A$34.6 million ($30.1 million) and its NTA as at July 2 was A$67.5 million ($58.8 million).
Upon completion of the deal, Border Express will join the transportation companies held under the FMH Group umbrella, such as GKR Transport, Niche Logistics, BagTrans, Formby Logistics and Spectrum Transport.
"This transaction aligns with SingPost’s strategic ambition to expand its logistics network and foster synergy within its Australian operations to deliver enhanced value to its customers and partners," says SingPost, which is struggling to turn its domestic mail operations profitable amid structural changes.
"In addition to this transaction, SingPost has reached agreement with the remaining minority shareholders of FMH to take its ownership to 100%," SingPost says, adding that the Australian integrated logistics market is estimated at over A$120 billion.
The expansion would further enhance the FMH Group as a pan-Australia national logistics player in the country's integrated logistics landscape.
“FMH Group has built a sustainable integrated logistics business in Australia. This acquisition is immediately accretive to earnings, solidifies FMH as a leading logistics provider, and continues the growth and development of our Australian operations," says Vincent Phang, group CEO of SingPost.
"We look forward to welcoming Border Express to the FMH Group and SingPost Group family," he adds.
“Border Express is a highly-regarded transportation provider throughout Australia. Upon completion, the acquisition will support FMH Group to realise the vision of a new logistics ecosystem where people and physical assets are connected through a ubiquitous technology platform, enabling true supply chain efficiency,” says Simon Slagter, group CEO of FMH Group.