What Freightways expects from Dataprint acquisition

NZX-listed courier company Freightways will pay up to $6.5 million for printing and data management company Dataprint.

It expects revenue of $6m in 2013, with EBITDA of $1m.

The deal involves an upfront payment of $3 million, with a further $3.5 million paid over the next three years, subject to performance targets.

Freightways managing director Dean Bracewell told NBR ONLINE it acquired Dataprint because it complements its existing mail delivery business DX Mail.

"Dataprint works in the mail house sector. It receives data from businesses, such as raw billing data, and turns it into readable information for customers."

He says acquiring Dataprint means it can use its DX Mail business to send the information to customers physically, or digitally through Dataprint.

Mr Bracewell says there has been a notable shift from physical to digital in terms of how customers want to receive information such as bills.

"That is why we see Dataprint as being a great opportunity to complement what we are already doing, to ensure we have a service for customers who want to look at digital mail.

"Before, we didn't have a service like this so if customers decided to go digital, we would probably have had to outsource that."

Buying Dataprint won't deliver Freightways any cost savings, but that is not why they bought it, says Mr Bracewell.

"It's an exciting growth opportunity. We see $6 million in revenue that we expect to grow significantly over time.

"Dataprint is a small player in a big market, and with the transfer from physical to digital mail it just opens up a raft of new opportunities we can offer to our customers."

Mr Bracewell says Freightways can take advantage of its existing customer base to grow the Dataprint business.

"We will be able to offer customers who use us for their delivery services a service to help them present their billing or transactional mail through Dataprint."

He says Freightways will keep the Dataprint brand.

Dataprint's management team and its 20 staff will remain, and the company will be run as a stand-alone business.

Freightways shares have risen 0.5% since the announcement this morning to $3.82.