A DESIRE to capture e-commerce growth is said to be behind Singapore Post’s decision to acquire Australian fourth party logistics provider Freight Management Holdings.

SIngPost subsidiary, SingPost Logistics Pte Ltd, has just entered into a conditional sale and purchase agreement with Freight Management Holdings shareholders also agreeing to a share subscription agreement with FMH to acquire an aggregate 38% equity interest in the company.

FMH is incorporated in Victoria and last financial year it had net profit before tax of about A$20.3m and net tangible assets are about $26m.

The acquisition is worth A$85m or S$84m.

SingPost Logistics is to acquire the aggregate 38% equity interest via a combination of subscription of new ordinary shares to be issued by FMH and the acquisition of existing ordinary shares from some existing shareholders of FMH.

The money is to be paid in two tranches, the first of about $59m and the second of about $26m.

“Australia is one of the largest and most developed eCommerce markets in the Asia-Pacific region by gross merchandise value, and the overall Australian CEP market is estimated to be worth A$10bn today,” SingPost said in a statement to the Singapore Stock Exchange.

“COVID-19 has accelerated eCommerce adoption and is pushing retailers to adopt online sales channels more rapidly. Volumes continue to grow, and the CEP market is expected to benefit from these trends.”

SingPost was represented by law firm Norton White.