SINGAPORE - Home-grown logistics company Yang Kee Logistics plans to acquire New Zealand Exchange mainboard-listed Fliway Group for S$52.1 million.
The deal, done with the support of trade agency IE Singapore, is expected to boost Yang Kee's revenue by S$81.9 million and help it gain a stronger foothold in the Oceania market.
This comes after Yang Kee announced its first Oceania acquisition of Australia logistics company Axima in March this year.
The combined Yang Kee group will have over 1,050 employees across 12 countries and an expected revenue of more than S$400 million once the acquisition is fully completed.
The proposed acquisition involves Yang Kee acquiring all outstanding shares in Fliway for NZ$1.22 cash per share by way of a scheme of arrangement. The scheme is conditional on the approval of Fliway's shareholders and the High Court.
"It is part of our vision to strengthen our presence in Oceania as we go global. New Zealand has a stable currency and economic outlook, a growing middle class, and a demand for integrated freight and logistics solutions. New Zealand also enjoys strong trade relations with Australia, with bilateral trade reaching NZ$24 billion for the year ended March 2017," said Yang Kee Logistics group chief executive Ken Koh.
"We hope to yield greater synergies from the network integration of shared international freight volumes between Fliway and Axima and cross selling opportunities in their combined customer bases to Asia."
Fliway is one of New Zealand's largest fully integrated logistics providers.
"This is a significant milestone for Fliway, and reflects our long held view that there are strong growth opportunities that come from leveraging a larger geographic footprint across Oceania and Asia. Being part of the Yang Kee Group delivers on that and provides scale to support Fliway's customers, both in New Zealand and throughout the Asia-Pacific Region," said Mr Duncan Hawkesby, the managing director of Fliway Group.
Yang Kee is partnering IE Singapore closely as it embarks on an acquisition strategy to gain new networks and capabilities to become a global logistics player. IE Singapore worked with Yang Kee to deepen its foothold in these markets and enhance its end-to-end supply chain networks.