Ken Harris sells NZL to recycle capital into ContainerCo
Wellington businessman Ken Harris has sold NZL Group 10 years after leading a management buy-out of the transport and logistics firm and plans to recycle the funds into container depot operator ContainerCo (NZL), which is taking up more of his time.
New Plymouth-based Transport Investments Ltd completed its acquisition of NZL yesterday, filings to the Companies Office show. Former NZL owner Ken Harris confirmed the sale of what he described "the best transport business in New Zealand". He declined to say what the sale price was, although he said those funds would help capitalise container depot operator ContainerCo for the next few years as it steps up investment in new technology and automation sweeping the transport sector.
"There's no question there's a huge opportunity available to ContainerCo," Harris told BusinessDesk. "I'm happy with the price - it was a fair price for both parties, I didn't try taking the last dollar out of the business."
Harris led the NZL buy-out in 2006 from P&O with his business partner Murray Leacock and Mike Pohio, one-time chief executive of Tainui Group Holdings. At the time, the stevedoring and logistics group generated annual revenue of about $56 million and after the management buy-out it was turning over more than $100 million by 2009.
That level of revenue puts NZL in the same ball-park as NZX-listed logistics firm Fliway, which projects annual revenue of about $82 million, and is currently attracting a market value of about $47 million.
Harris's new focus, ContainerCo, was formed through the 2013 merger of NZL Group's $5.1 million container depot business with United Containers and the $787,000 purchase of CentrePort's Transport Systems 2000 hire and sales business.
ContainerCo, which Harris co-owns with the New Zealand arm of COSCO, a subsidiary of shipping giant China Ocean Shipping (Group) Co, employs 150 staff at operations in Tauranga, Auckland, Napier and Christchurch, and generated $43 million in annual revenue in the 2016 financial year.
The container company last year hired investment bank Cameron Partners to examine funding options to expand the business's level of automation, and Harris today said the NZL sale will provide enough capital for the next few years for increased automation and new logistics technology.
As ContainerCo seeks to expand overseas, "we'll be encouraging additional capital down the track," he said.
Transport Investments Ltd began life as the Hooker Brothers transport company and came under the control of the current management headed by managing director Jim Ramsay in 1989.
The NZL acquisition follows TIL's recent purchase of Christchurch-based Move Logistics in May.