SingPost to buy Australia’s Border Express for up to A$210 million

SINGAPORE Post (SingPost) has proposed to fully acquire Australian courier and logistics services provider Border Express through its subsidiary in the same country, Freight Management Holdings (FMH).

This will come at a maximum purchase consideration of A$210 million (S$183 million), comprising an initial purchase price and a potential earn-out payment based on the acquisition terms. The deal will be funded by internal cash and Australian dollar-denominated borrowings.

Border Express’ network spans 16 facilities, a fleet of over 700 vehicles and 1,300 employees.

On Wednesday (Nov 1), SingPost said its acquisition of Border Express would augment and widen FMH’s business-to-business-to-consumer integrated logistics network as well as reach. The deal is also expected to enhance FMH’s service offerings while increasing its scale and market share.

This will strengthen FMH’s position in the Australia market. It will also continue to drive the company’s revenue and earnings growth. This process will enable SingPost to further its strategic ambitions in the country over the long term, said the group.

Assuming the acquisition was completed on Mar 31, 2023, SingPost’s pro forma net tangible assets per share as at the same date would have been S$0.0022 instead of S$0.0028. Had the deal been completed on Apr 1, 2022, the group’s earnings per share would have been S$0.0155 instead of S$0.0062.

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SingPost said the proposed acquisition of Border Express aligns with the group’s strategic ambition to expand its logistics network, and foster synergy within its Australian operations to deliver enhanced value to customers as well as partners.

“This acquisition is immediately accretive to earnings, solidifies FMH as a leading logistics provider, and continues the growth and development of our Australian operations,” said Vincent Phang, group chief executive of SingPost.

In addition to the deal, the group also said it has reached an agreement with minority shareholders of FMH to take its ownership level in the company from 88 per cent to 100 per cent.

Shares of SingPost : S08 0% were trading S$0.005 or 1.1 per cent lower at S$0.445 as at 3.01 pm on Wednesday, after the news.