K&S and Scott’s Transport reach deal
Merger of listed firm with related private company goes ahead
Corporation has been in negotiations with privately owned Scott’s Transport Industries (STI) to purchase the business, a deal of which has been struck.
Confirming a binding agreement of the deal unveiled in November, K&S will merge STI into its business from January 30, with the company to handle STI’s employees, ongoing contracts and staff entitlements.
According to K&S, the deal reached will provide it will access to a national fuel haulage arm and extra help with general and intermodal freight.
“STI operates a general freight division and a fuel cartage division and has a number of blue chip customers in the manufacturing, FMCG, and fuel sectors,” an ASX statement says.
“K&S Corporation regards the proposed transaction as an excellent opportunity to further expand its K&S Energy division through the addition of significant fuel cartage operations.
“The transaction will also provide additional volume to K&S Corporation’s existing intermodal and contract logistics divisions.
“The transaction will lead to a more competitive and stronger combined business in an increasingly challenging environment.”
From an STI point of view, the ASX statement says the transporter has agreed to: • a “nominal purchase price”
for its assets • rent a number of vehicles to K&S at market rates for up to five years • without obligation, sell
rented vehicles to K&S • allow K&S to see STI’s
business financials • produce licence and lease agreement by land owners who are related parties of STI for the remainder of the transport terminals currently occupied by STI. K&S predicts there will be a rationalisation of infrastructure to reduce operational costs and will undertake a review of STI’s current operations.
The company says it did not need shareholder approval for the transaction.
It adds that “negotiations for the transaction have been conducted by an independent subcommittee of the board of directors” and that it “believes that the terms of the transaction are fair and reasonable in all the circumstances and are otherwise on arms’ length”.