30/11/2015 - 15:17

Goldstar Transport completes purchase

30/11/2015 - 15:17

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Kewdale company Goldstar Transport has struck a deal to buy the major assets of MJ & CM West Transport Services, nine months after another Pilbara-focused transport business changed hands.

Goldstar Transport completes purchase
Goldstar managing director Sean Carren. Photo: Attila Csaszar

Kewdale company Goldstar Transport has struck a deal to buy the major assets of MJ & CM West Transport Services, nine months after another Pilbara-focused transport business changed hands.

Goldstar finalised the purchase with West Transport’s receivers McGrathNicol on Friday and is due to settle this week.

Goldstar managing director Sean Carren said he expected to offer jobs to 30 staff at West Transport, including its former owner Murray West.

He said the purchase would also give Goldstar access to new market segments, with West having several large crane trucks.

“We picked up the most valuable assets, the people, the customers, the equipment,” Mr Carren said.

“It’s a significant investment for us, several million dollars.”

The purchase adds to the growth of Goldstar, which Mr Carren started 12 years ago with one truck.

Goldstar currently has 82 trucks, 158 trailers, 136 staff and extra casuals, servicing a range of sectors including fast-moving consumer goods, steel, construction and containers.

Its diversified customer base contrasts with West Transport’s reliance on the mining industry, which was reinforced by its 2013 purchase of Pilbara-focused Liftmec Specialised Transport Services.

Midland-based West Transport’s last big win was in March 2014, when it was awarded the transport contract for the Roy Hill port project at Port Hedland through construction company McConnell Dowell.

The business went into administration in December 2014 and subsequently entered a deed of company arrangement, allowing it to continue trading, but was placed in receivership in September this year.

McGrathNicol partner Rob Kirman said West’s failure reflected the tough trading conditions in the transport sector, with turnover falling and margins squeezed.

“The level of debt it was carrying just wasn’t sustainable,” he said.

Mr Kirman said the directors invited their major lender to appoint receivers, after the company was unable to meet a large payment needed to sustain its insurance coverage.

West’s revenue had fallen from $15 million in FY12 to $12 million in FY15 and was heading for a material decline in the current financial year.

Mr Carren praised the support of his finance broker, PTR Asset Finance, in putting the West acquisition together.

He said the change of ownership would cause minimal customer disruption.

Goldstar plans to consolidate all of its operations at its Miles Road facility in Kewdale in the New Year.

The sale of West Transport’s key assets follows the sale of another Pilbara-focused transport company, Chameleon Resources, in February this year.

Listed company QUBE Holdings paid just under $5 million for Chameleon, which was founded by director Peter Newbold 16 years ago.

Mr Kirman, who was appointed Chameleon’s administrator in December 2014, said there were several similarities to West Transport.

In particular, Chameleon was caught by high debt as a result of property acquisitions in Karratha, and falling revenue and margins.

Its revenue fell from $14 million in FY13 to $9.3 million in FY14.

Qube bought the business as a going concern and retained its remaining staff.

Chameleon was Qube’s fifth WA acquisition in four years, according to the BNiQ M&A database maintained by Business News.

Its other WA acquisitions were Port Hedland-based companies Oztran Australia and Walmsley Bulk Haulage, along with IML Logistics and Giacci Group

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