Freightways‘ CEO Mark Troughear

Freightways Limited has entered into a sale and purchase agreement to buy Big Chill Distribution Limited. 

Big Chill is a New Zealand market leader in temperature-controlled transport, specialising in fast moving consumer goods and time critical parcel freight, both chilled and frozen. Big Chill operates a fleet of more than 200 temperature-controlled trucks and trailers and delivered more than two million shipments in 2018 through its nationwide network of depots and purpose-built cool stores.

“The acquisition of Big Chill represents a highly compelling transaction and will provide Freightways with both short and long-term growth opportunities, while further diversifying its earnings base,” said Freightways‘ CEO Mark Troughear. “Big Chill‘s founders and senior management have done a fantastic job growing the business and we look forward to working together, recognising the strong cultural alignment between our two businesses.”

Freightways will make an initial payment of $117m, representing 80% of Big Chill‘s current value. The final 20% will be paid in 2022, with the price based on Big Chill‘s earnings and value at that date.

The purchase will be funded by debt, with Freightways net debt expected to increase temporarily. The deal is subject to Overseas Investment Office approval, and should be completed in the first half of 2020.

Big Chill offers market share in a sector of the market that would provide Freightways protection against economic cycles and diversity from its current businesses.

Freightways expects there will be a range of benefits from leveraging the respective strengths and areas of expertise of the combined businesses, as well as some cost benefits.