Freightways acquires medical waste company
Freightways Limited (Freightways) has diversified its presence in the Australian market with the purchase of the
business and assets of State Waste Services (Australia) Pty Ltd and its related entities (collectively, SWS). SWS
provides medical waste services in Sydney and surrounding regional areas. The acquisition will be effective from 1
September 2017.
SWS provides collection, treatment and disposal of medical waste, as well as ancillary services, including sanitary bin
services, secure document destruction and total waste management solutions.
SWS provides Freightways’ wholly-owned subsidiary Shred-X Pty Ltd (Shred-X) with a new service offer. As a secure
destruction company, Shred-X identified the medical waste industry as an attractive complementary market with growth
opportunities. Shred-X will leverage its national footprint of facilities, management expertise, internal resources and
existing customer base to expand into the medical waste industry.
The purchase price for SWS includes an initial payment of A$6 million and a potential maximum earn-out payment of A$4
million, measured as at 30 June 2021 and based on incremental earnings performance.
It is expected that in its first 12 months of Freightways’ ownership, SWS will generate revenue of A$3 million and
earnings (operating profit) before interest, tax, depreciation and amortisation (EBITDA) of A$1 million. Capital
expenditure applicable to this acquisition in the next 12 months is expected to be approximately A$0.1 million. This
acquisition is expected to be immediately EPS (earnings per share) positive.
Freightways operates in the express package & business mail and information management markets. This acquisition is consistent with Freightways’ strategy to develop
growth opportunities that complement its existing capabilities.
ENDS