CTI buys Jayde Transport

CTI Logistics has acquired national business Jayde Transport in an all-cash deal worth up to $7.5 million, as it seeks to lessen its reliance on the local market.

Perth-based CTI said it would pay an initial $6.5 million to acquire Jayde, a road and rail transport and warehousing business that operates in all states and owns facilities in Perth, Melbourne and Adelaide, plus a further deferred $1 million payment.

According to the BNiQ Search Engine, Jayde has 180 employees nationally, with 110 of those located in WA.

The acquisition represents an earnings before interest, tax, depreciation and amortisation multiple of 3.2-times.

The deal excludes a container operation of Jayde’s located at the Fremantle wharf.

The target’s founder, Harvey Mack, will remain with the business in a consultative role until the end of next year.

“This acquisition is in line with the company’s strategy of expansion into areas related to our existing core businesses, with synergies expected from our existing operations in Adelaide and Melbourne, and also in Perth, where the plan is to lease the current Jayde Forrestfield complex until the further development of our Hazelmere site facilities consolidation with other CTI distribution operations,” CTI said in a statement.

“The acquisition is also in line with the company’s strategy of continuing to build on our national business and lessening reliance on Western Australia, with 75 per cent of current Jayde revenue generated from outside WA.”

Investors welcomed the news, with CTI shares gaining 4.7 per cent, or 5 cents, to close at $1.10.