Silk Logistics Holdings Limited (ASX:SLH) entered a binding agreement to acquire Secon Freight Logistics Pty Ltd for AUD 35 million on August 4, 2023. The acquisition price consists of AUD 30 million payable upfront in cash, 2.5 million in Silk shares as part of upfront acquisition price and A deferred earn-out payment (payable in cash) determined with reference to 5.0x normalised annual EBITDA achieved by Secon during each year in FY24 and FY25. The upfront cash price will be funded using Silk?s club acquisition facility with NAB and Rabobank. The share consideration is based on a 30-day VWAP prior to the execution date. The share consideration will be issued under Silk?s existing Listing Rule 7.1 capacity and will be held in escrow until June 30, 2024. Secon generates annual revenue of over AUD 65 million as well as strong margins and operating cashflow. The acquisition is expected to contribute positively to Silk?s group earnings immediately and be over 10% earnings per share accretive in the first full year of ownership, before accounting for any potential synergies and integration costs. The transaction is subject to the satisfaction of customary conditions including consents to change of control from major customers and landlords and expected to complete on September 30, 2023.

Silk Logistics Holdings Limited (ASX:SLH) completed the acquisition of Secon Freight Logistics Pty Ltd on September 1, 2023.