Flush with close to $100 million from the sale of some of its Australian assets, Mainfreight is down to a shortlist of half a dozen potential acquisition targets in the United States.
But the transport and logistics company is wary of getting into a bidding war with private equity firms, and says it is prepared to wait for the right deal.
Mainfreight is selling two of its Australian businesses - Pan Orient Project Logistics and its 75 per cent shareholding in freight forwarder LEP - to Agility Group for $96 million.
Managing director Don Braid said the money had been earmarked for expansion and would not be returned to shareholders. "We've got a shortlist of six companies in the US that we'll be seeing at the end of April."
First NZ Capital analyst Andrew Mortimer said that at a conservative estimate Mainfreight had $200 million to $250 million available for acquisitions.
Mainfreight already owns US freight forwarder CaroTrans International. It has been talking for several months about acquiring another US freight forwarder, but has warned that competition from private equity firms might push prices too high.
"We've always said it's about the right company at the right price," Mr Braid said. "We won't be pushed into an acquisition."
Analysts said that getting a good price would be tough in the present environment. "Offshore acquisitions remain likely. However, we believe management is treading carefully in this regard," said a research note from UBS. "We would not be surprised if no such acquisitions happened in this calendar year."
Mr Mortimer said: "It just comes down to whether you can get them (acquisitions) at the right price. That could be problematic in the current environment. "We have seen a lot of companies mentioning acquisitions but taking a lot longer to consummate because prices are too high."
Mr Braid said that as well as the US, Mainfreight was also looking at acquisition opportunities in Australia and South-East Asia. While the recent divestments would create a gap in Mainfreight's Australian operations, they did not make an Australian acquisition any more likely. "Our expansion is likely to be more global than just New Zealand and Australia."
