The transaction involves a $30m upfront cash payment and $5m in Silk shares
Gadens has advised ASX-listed Silk Logistics Holdings Limited on its acquisition of Secon Freight Logistics Pty. Ltd for $35m.
According to a 1 September ASX announcement made by Silk, it obtained 100% of Secon Freight’s shares through a $30m upfront cash payment and the issuance of $5m in Silk shares. The upfront cash payment will be supported by Silk’s club acquisition facility with NAB and Rabobank, according to Prime Mover Magazine.
The share issue price was calculated based on a 30-day VWAP (volume weighted average price) before the execution date. A total of 2,502,628 fully paid ordinary shares were issued which will be held in escrow until 30 June 2024.
The transaction, which was finalised on 31 August, also involves a deferred earn-out component that will be payable in cash upon completion of certain EBITDA targets for each of FY24 and FY25. Prime Mover Magazine noted that the completion of the deal was also subject to customary conditions like consents to change of control from major customers and landlords.
Silk CEO Brendan Boyd said in a statement published by Prime Mover Magazine that the acquisition scales up the company’s footprint in Victoria and “provides Silk with a significant platform in national bulk logistics, unlocking demand from our existing blue chip customer base as well as other potential cross-selling opportunities.”
The Gadens team that worked on this deal was led by corporate partners Jol Rogers and Melissa Phillips, with support from banking and finance partner Elliot Raleigh, senior associate Isabella Barnes, and corporate advisory lawyer Daphne Chiang.
Silk is a national port logistics, warehousing, and distribution services provider in Australia. Secon specialises in container cartage, warehousing, distribution, and bulk services.