10/06/2015 - 14:28

CTI to buy GMK Logistics for $27m

10/06/2015 - 14:28

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West Perth-based trucking company CTI Logistics has acquired an unlisted Sydney-based logistics business with national reach, in exchange for a cash and share package worth $27 million.

CTI to buy GMK Logistics for $27m

West Perth-based trucking company CTI Logistics has acquired an unlisted Sydney-based logistics business with national reach, in exchange for a cash and share package worth $27 million.

CTI will pay $10 million in cash and $2 million in shares, at $1.40 each at settlement to acquire GMK Logistics, with a first deferred payment of $13.5 million paid by September 15 and a second deferred payment of up to $1.5 million subject to performance levels in the next financial year.

The funds will be paid to GMK’s holding company, Logico Operations Group.

CTI will fund the initial and final payments with existing facilities, while the first deferred payment will be funded by a new bank facility.

This new bank facility will require shareholder approval at a general meeting.

Logico chief executive Derek Lightfoot, who previously served as CEO of StarTrack, has been retained to run GMK from its Sydney headquarters.

“GMK is a leader in the warehousing and distribution of floor coverings throughout Australia,” CTI said.

“With warehouses in Brisbane, Newcastle, Sydney, Melbourne, Adelaide and Perth, GMK provides CTI with a national footprint from which to grow its transport and logistics businesses.”

The company said it retained sufficient balance sheet flexibility and had the capacity to significantly reduce debt by selling and leasing back certain mature property assets from its portfolio.

The purchase was made for approximately 4.5 times EBITDA.

CTI shares were unchanged at 1.32 per share at 2pm.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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