Specialist chemical business, DGL, has announced the strategic acquisition of Shackell Transport.
Shackell Transport is a freight carrier service that specialises in bulk liquid haulage.
The acquisition price of $8.9 million includes Shackell Transport’s fleet, consisting of 28 primer movers, 22 bulk liquid tankers and 31 trailers that cater for specialised products and services.
As DGL manufactures, transports, stores and processes chemicals and hazardous waste, the purchase makes for a natural fit enabling it to expand upon its interstate fleet.
Shackell Transport has been operating for over 40 years, offering regional and interstate distribution and linehaul services across Australia to customers in the food, mining, chemical, agricultural, building and construction industries.
As the first acquisition for DGL’s Warehousing and Distribution division it will complement existing fleet, bringing synergies and greater control over the distribution of chemicals, while also enhancing the Company’s visibility and access to the bulk chemical industry.
“Through the acquisition of Shackell Transport we are significantly expanding our transport fleet, adding 71 quality vehicles to the Group. Shackell Transport further enhances our service offering to our customers, providing them with additional services and capabilities to align with their needs,” said DGL Founder and CEO Simon Henry.
“We are seeing more of our customers seeking efficiency in their supply chains and moving towards consolidating suppliers. By expanding our interstate transport and bulk tanker fleet, we are cutting out the need for multiple suppliers, saving on transport costs and offering our customers all services in the sphere of chemical management,” he said.
Investing in equipment, according to a statement issued by DGL, is a core part of its growth strategy to achieve further economies of scale, driving growth through organic opportunities and greater operating efficiencies.
“Investing in quality equipment sets us up for the long-term and ensures we are able to keep up with the demand the industry requires. Expanding our inter-state transport fleet brings synergies between our three divisions and connects our Australia-wide network of facilities, giving us greater control over distribution and the customer service experience,” said Henry.
The favourable acquisition price is considered equal to the asset value alone.
It consists of a cash payment of $7.8M in addition to the issue of 506,912 fully paid ordinary shares in the capital of DGL.
At the time the parties negotiated the conditional commercial terms in September 2021, the consideration represented a valuation of 7 x FY21 normalised Earnings Before Interest, Taxes, Depreciation, and Amortization, and based on the current market price of DGL shares, a valuation of 7.3 x FY21 normalised EBITDA.