ONELOGIX sold PostNet despite its valuable contribution to group income because the specialist skills the media and communications business required fell outside the focus of the listed logistics group.
It said courier and express parcel distribution was a significant component of PostNet’s product mix, which demanded extra specialist skills relating in particular to retail and last mile delivery logistics.
“These are skills that fall outside the core focus of the group. This scenario poses a risk to OneLogix and PostNet in terms of potential vulnerability in correctly anticipating consumer requirements and competitive activity,” it said.
OneLogix reported on Monday it had agreed to sell PostNet to global logistics and transportation provider Aramex for R190.5 million cash with immediate effect. The transaction is not subject to outstanding conditions.
PostNet started operations in 1994 and has grown into a chain of 287 stores and services 55 000 customers daily across the country. It provides a one-stop centre for entrepreneurs, businesses, households and consumers, offering services including courier, copy, digital print, stationery, mailboxes and more.
Aramex owns the master franchise for PostNet in South Africa but each store will continue to be owned and operated by the respective franchisees.
Aramex is a publicly-traded company on the Dubai Financial Market and employs more than 13 900 people in 354 locations across 60 countries.
The company first entered the South African market with the acquisition of Berco Express, now Aramex South Africa, in 2011.
Hussein Hachem, Aramex’s global chief executive, said the acquisition of PostNet would drive Aramex’s expansion on the African continent and boost its global network. “As we continue to scale Aramex into new growth markets and bridge trade corridors, this acquisition will expand Aramex’s volume of business in Africa considerably.
“Investing in growth markets’ e-commerce sectors is also part of our wider strategy to maintain Aramex’s position as an e-commerce market leader.
“We will remain bullish on our outlook for future acquisitions in markets across Asia, the Middle East and Africa in particular, both to build our operations and strengthen our global footprint.”
Andy van der Velde, Aramex South Africa chief executive, said this deal would further extend Aramex’s service proposition to many more locations across the country, with customers now being able to pick up and drop off packages from across 287 locations.
Chris Wheeler, PostNet SA chief executive, said it believed Aramex was the right partner to further expand PostNet’s presence in the country and Africa. “Our customers will benefit from Aramex’s global network, breadth of shipping and delivery options and its innovative, customer-focused technologies while still being able to enjoy our services.”
OneLogix intends to use the proceeds from the transaction to pay down short-term debt of about R33m, with the balance to fund the group’s growth through acquisitions and investments in organic initiatives.
The net asset value attributable to PostNet at end-May, OneLogix’s latest financial year-end, was R6.4m and the net profit after tax attributable to PostNet for this reporting period was R10.6m.
Vehicle delivery services is OneLogix’s largest business and, with commercial vehicle delivery services, is a major operator in automotive logistics in South Africa and the southern African region.
OneLogix shares remained unchanged to close at R5.40 on Monday.