Silk Logistics Acquires Secon Freight: Expanding Port and Bulk Capabilities

Silk Logistics Holdings Limited (ASX: SLH) has recently signed a binding agreement to acquire Secon Freight Logistics Pty Ltd (‘Secon’), a reputable Melbourne-based port and bulk logistics provider. The acquisition is set to bolster Silk's presence in Victorian port logistics and expand its bulk logistics capabilities. Secon, established in 1969, operates with about 160 staff across strategic locations in Victoria, offering specialized port logistics, bulk logistics, warehouse, and distribution services.

The strategic move is expected to create immediate cross-selling opportunities among their respective client bases and result in increased scale and enhanced margins for Silk. The acquisition is projected to be earnings and EPS accretive in its first year. Secon's annual revenue exceeds $65 million, with strong margins and operating cash flow.The acquisition price consists of $30 million payable upfront in cash, $5 million in Silk shares, and a deferred earn-out payment in cash based on Secon's performance in FY24 and FY25. The transaction is subject to customary conditions, with completion anticipated on 30 September 2023. Following the acquisition, Secon's existing leadership, including CEO Daniel Considine, will continue their roles.

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