Tuesday, March 8, 2011

Mainfreight's European Acquisition a Good Move

Lets get this out in the open. I am a proud supporter and investor in Mainfreight Ltd [MFT.NZX] and I have been singing its praises as a company for the 4 years I have been a shareholder and a few years before that when I was "just looking".

It has provided excellent returns to shareholders in the past and with this acquisition looks to add to that track record in a positive way.

It is in my view probably the best run medium sized public/private company in New Zealand with a great client centred and employee focused culture and is fast becoming the best run logistics company in a global sense.

Management have clear goals, indicate when and what they are going to achieve and if they don't achieve those goals blame nobody else but themselves.

They care about their staff and clients and their no bullshit policy of saying what they mean and doing what they say should be followed in boardrooms across the country.

I would like to be able to criticize the company in some way - for that is part of what I do here if it is warranted - but I just cannot find fault.

You might call me just a little biased.

Wim Bosman Group looks to have a similar business culture to MFT and is still being run by its founder Wim Bosman so looks to be the perfect fit for European expansion.

With the above in mind let me give you my view on the announcement yesterday by the company that they are to buy European logistics company Wim Bosman Group for €110 million.

The purchase, yet to be given approval by MFT shareholders, will be the company's first foray into Europe and with ebitda of €19.4 million on revenue of around €240 million in 2010, while not overly attractive in terms of returns, is nevertheless a platform on which to grow the company in that part of the world and another jigsaw piece in their global network of businesses that now see them have a presence in North America, Australasia and Asia.

The increasingly bigger reach will enable them to be more seamless and efficient in terms of global freight forwarding as they will not have to rely as much on other logistics companies to get their customers goods from a to b. Having control of your logistics chain is a big plus in terms of delivering for your customer.

This means happier customers and more revenue for the company and profit off the back of that.

This makes for happy shareholders.

Thus far, Mainfreight and its extensive acquisition history shows that they have been able to add value to the company as a whole when buying companies and that is not something that can be said of many New Zealand listed businesses.

There is a shareholders meeting on March 24 to ask shareholders for their approval of this purchase and judging by the nearly 6% rise in share price yesterday to a record $8.59 the market at least sees the news on the acquisition as a positive.

I clearly do too and recommend to my fellow owners of Mainfreight that they approve this latest purchase.

MFT Shareholder Proposal & Voting Forms

Win Bosman Group

Win Bosman on sale to MFT
About Win Bosman

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c Share Investor 2011