Lindsay Australia Shares Underperforming, Could SRT Acquisition Provide Boost?

Lindsay Australia (ASX: LAU), a major player in the transport sector, is set to expand its national reach significantly with the acquisition of Tasmania’s largest refrigerated logistics provider, SRT Logistics. The Brisbane-based company is acquiring SRT for a total of $108.2 million. This strategic acquisition marks Lindsay’s first expansion across the Bass Strait, further enhancing its logistics capabilities.

The deal is structured as a cash-and-scrip transaction, with Lindsay’s assumption of SRT Logistics’ existing debt. As part of the agreement, SRT shareholders will receive $30.2 million in scrip and $57.2 million in cash, and post-acquisition, they will control approximately 12.8% of Lindsay Australia shares.

Established in 1953 by Tom and Peter Lindsay, Lindsay Australia has consistently expanded its operations, and this acquisition aligns with its long-term growth strategy. Clay McDonald, CEO of Lindsay Australia, regards the move as transformative, enhancing the company’s national service offering significantly. SRT Logistics will operate as a wholly owned subsidiary, maintaining its brand and service quality under Lindsay’s umbrella.

SRT Logistics, founded in 1996, has built a solid reputation for serving major food manufacturers, producers, and retailers with longstanding, reliable partnerships. The acquisition is expected to bolster Lindsay’s earnings, with anticipated revenue of $137.6 million from SRT in FY25 and earnings before interest and tax projected at $14.6 million.

Aligned with this growth, Lindsay Australia forecasts an underlying EBITDA of between $80 million and $82.5 million in FY25. It is also projected that Lindsay’s earnings per share will increase by about 15% on a pro forma basis due to the acquisition. The deal is expected to be finalised by 30 June 2025.Furthermore, Robert Miller, SRT Logistics’ CEO, will join Lindsay Australia’s board as an executive director, ensuring a seamless integration and the continuation of SRT’s valued service.

Analysts view of LAU’s shares is broadly bullish, with the low price target of $0.85, and the average of $0.95 both reflecting potential upside from the current price action. The share price has come under increasing pressure this year, with the 2025 YTD drop of 18.54% coming as the broader ASX All Ords has gained 1.36%. Taking a look at the 3 year chart, and it is clear that a shift in sentiment is required for bulls to reverse the underperformance. It will be hoped that this acquisition can be the first step on that path.