MaxiTrans snaps up Trout River Australia


Live bottom trailer manufacturer purchase franks new parent’s consolidation strategy

MaxiTrans snaps up Trout River Australia
A Trout River Australia product

 

Trailer giant MaxiTrans has bought trailermaker Trout River Australia’s owning company in a move in line with its consolidation strategy.

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

The purchase comes just three months after it sold its 80 per cent holding in Chinese panel business.

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 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.


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

MaxiTrans expects the acquisition to provide benefits to the group, including:

  • the addition of live bottom trailers into MaxiTrans’ portfolio will add products with strong application in the infrastructure construction sector
  • leveraging MaxiTrans’ national dealer network will drive increased sales of Trout River Australia live bottom trailers
  • improved production capacity and efficiency of the existing Trout River Australia business by leveraging MaxiTrans’ facilities, procurement systems and engineering and manufacturing expertise
  • improved after-sales customer service for Trout River Australia customers through the MaxiTrans’ national parts network, MaxiParts, as well as MaxiTrans' national network of repair and service facilities.

"We look forward to welcoming John Surwillo and Neil Lehman, the current owners of Trout River Australia, to the MaxiTrans group," MD 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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