Corporate: Salmat is offloading it's letterbox dropping business for $25m

Marketing services provider Salmat (ASX:SLM) is selling another business – this time it’s Reach Media NZ – a letterbox and e-catalogue distribution business.

Salmat began in 1979 purely as a mail distribution business. But in recent years it has expanded into digital marketing over time and has sold off non-core assets.

In March 2018 it sold its call centre business for $53m. This followed the offloads of its MessageNet and Interactive businesses.

Today it has sold off Reach Media NZ for $25m to IVE Group who promised to invest a further $25m-$30m into the business.

While the post-overhaul business will still involve physical letterbox delivery (as well as e-catalogue distribution), the collation process will be automated.

According to the company, Reach Media clients total 2,500 and include Countdown (Woolworths’ stores in New Zealand), Harvey Norman and Mitre 10.

CEO Matt Aitken said the business would improve return on investments for his company’s retail clients.

Salmat’s remaining services include digital catalogue hosting service Lasoo as well as personalised outsourcing services.

However, Salmat CEO Rebecca Lowde said she was continuing to consider the futures of those businesses as well.

She said she believed the proposal for the sale of Reach Media NZ was the best available option and IVE would continue Salmat’s innovation strategy.

Shares have tanked for most of 2019 but today have jumped as much as 26 per cent.

In other ASX corporate news today:

Carbon foam panel maker CFOAM (ASX:CFO) updated shareholders on its proposed transaction with NYSE-listed Consol Energy. Under the deal, Consol will invest $US3.5m ($5.2m) for a 25 per cent stake and contribute further debt finance. The companies are continuing to work on a final deal.

Modular manufacturing play Fleetwood (ASX:FWD) won a NSW government construction contract. While the project could not be revealed until the government’s formal announcement, it told shareholders it was worth $35m over the next two years.