3 Oct 2011

Freightways buys NZ arm of Iron Mountain

6:46 pm on 3 October 2011

Freightways has strengthened its presence in the data management sector, buying the New Zealand arm of an American rival for $12.7 million.

The courier company and data storage says Iron Mountain will be merged into its subsidiary, Online Security Services.

The focus of Freightways data management arm has been Australia, but managing director Dean Bracewell says Iron Mountain wanted to get out of New Zealand and it presented an opportunity for his company that was too good to pass up.

"Iron Mountain are a global business, they are the biggest in the information management industry in the world, so to have an opportunity to acquire their New Zealand business is very positive for Freightways," he says.

Mr Bracewell expects revenue will jump $12 million and operating earnings by $1.5 million in the first full year of ownership, without taking into account any merger savings.

The acquisition will be funded out of debt, and lift its gearing ratio to 48.5%.

Mr Bracewell says that level of debt won't deter it from making further acquisitions if they come up.

Freightways shares ended Monday's trading up 6 cents to $3.26.