It is the second major purchase this year for Silk Logistics, an ASX-listed company that specialises in port logistics, after buying Victoria-based contract logistics service provider, 101Warehousing for $10.5 million.

Fremantle Freight & Storage (FFS), which started in 2000, has three sites in metropolitan Perth and one in WA’s south west. Its services include port logistics including warehousing, wharf cartage, warehousing, quarantine and fumigation.

In its announcement to the Australian Securities Exchange (ASX), Silk said the acquisition would add immediate scale to its business in WA and would increase demand from its existing clients and offer other potential cross-selling opportunities.

Silk CEO Brendan Boyd said the acquisition establishes Silk’s port logistics capabilities in Perth.

Brendan Boyd

“This will allow us to extend our elevated customer service offering nationally. FFS is an attractive opportunity, the business’ operating philosophy is highly aligned with Silk’s offering and will deliver operational efficiencies as well as further revenue growth,” he said.

“Silk also gains an exceptional team at FFS, who are the key to their success and will continue to drive significant value for FFS and the broader Silk business.”

FFS has annual revenue of more than $29 million and Silk said it has strong positive earnings and operating cash flow.

The acquisition of FFS will be funded through cash reserves and debt facilities (subject to approval).

The acquisition is expected to complete before 1 September 2022, subject to customary closing conditions, including certain third-party consents.

In February this year, Silk Logistics solutions company, Silk Logistics Holdings, announced it had completed its recent $10.5 million acquisition of Victoria-based contract logistics service provider, 101Warehousing.

The purchase expands Silk’s business into the fashion, homewares and toys sectors.

In the ASX announcement from Silk, it said 101Warehousing’s business model was aligned with its own, and is positioned to boost the B2C capability in the e-commerce marketplace.

Silk’s CEO Brendan Boyd said the purchase of 101Warehousing enabled opportunities for growth in the company’s port logistics and distribution branch.

“This acquisition of 101Warehousing is consistent with the company’s growth strategy as presented in the IPO prospectus and provides a number of opportunities to fast track the rapidly developing customer requirement for B2C and e-commerce capabilities,” he said.

101Warehousing founders Adrian and Bradley Kagan, along with key executive Paul Dutton, will remain on board.

By Neil Dowling