Max­iTrans snares Trout River brand

Owner Driver - - Tech Briefs -

TRAILER GI­ANT MAX­ITRANS has bought trailer maker Trout River Aus­tralia’s own­ing com­pany in a move which it says is in line with its con­sol­i­da­tion strat­egy.

The Aus­tralasian Ma­chin­ery Sales ac­qui­si­tion, bring­ing with it the man­u­fac­turer and sup­plier of live bot­tom trail­ers, is said to be a “key step” in Max­iTrans’ ‘Growth in Ex­ist­ing Mar­kets’ strate­gic ini­tia­tive.

In the 2018 fi­nan­cial year, Trout River Aus­tralia had about $10 mil­lion in an­nual sales and earn­ings be­fore in­ter­est, tax, de­pre­ci­a­tion and amor­ti­sa­tion (EBITDA) of about $2 mil­lion listed, Max­iTrans tells the ASX.

The ac­qui­si­tion is ex­pected to be earn­ings ac­cre­tive in the 2019 fi­nan­cial year, with re­turns an­tic­i­pated to ex­ceed Max­iTrans’ weighted av­er­age cost of cap­i­tal in the first full year of own­er­ship.

The ac­qui­si­tion of Trout River Aus­tralia will be com­pleted in two tranches: 80 per cent for $5.9 mil­lion in cash, sub­ject to cus­tom­ary com­ple­tion ad­just­ments, ex­pected to be com­pleted shortly, and 20 per cent for by June 30, 2021 un­der an earn-out ar­range­ment.

“Fol­low­ing Max­iTrans’ re­cent cap­i­tal al­lo­ca­tion re­view and the sale of MTC, the ac­qui­si­tion will be funded out of ex­ist­ing cash and debt fa­cil­i­ties,” the com­pany says.

Max­iTrans ex­pects the ac­qui­si­tion to pro­vide ben­e­fits to the group, in­clud­ing the ad­di­tion of live bot­tom trail­ers into Max­iTrans’ port­fo­lio, which it says will add prod­ucts with strong ap­pli­ca­tion in the in­fra­struc­ture con­struc­tion sec­tor.

The pur­chase is also ex­pected to lever­age Max­iTrans’ na­tional dealer net­work, driv­ing in­creased sales of Trout River Aus­tralia live bot­tom trail­ers.

In ad­di­tion, Max­iTrans says it will im­prove pro­duc­tion ca­pac­ity and ef­fi­ciency of the ex­ist­ing Trout River Aus­tralia busi­ness by lev­er­ag­ing Max­iTrans’ fa­cil­i­ties, pro­cure­ment sys­tems and en­gi­neer­ing and man­u­fac­tur­ing ex­per­tise.

“We look for­ward to wel­com­ing John Sur­willo and Neil Lehman, the cur­rent own­ers of Trout River Aus­tralia, to the Max­iTrans group,” Max­iTrans man­ag­ing di­rec­tor and CEO Dean Jenk­ins says.

“John and Neil’s on­go­ing in­volve­ment in the busi­ness will fa­cil­i­tate a smooth tran­si­tion and en­able the Trout River Aus­tralia busi­ness to con­tinue to ben­e­fit from their deep prod­uct knowl­edge.”

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