Brambles has signed a sale and purchase agreement to acquire Pallecon, a provider of intermediate bulk containers (IBC) in Europe and the Asia-Pacific, for €135 million (US$177 million).
Brambles CEO Tom Gorman said: "Pallecon has outstanding customer relationships, good growth prospects and a record of generating strong financial returns. It will complement our plans to grow our IBC operations worldwide, in line with our strategy of expanding our pooling solutions operations into a broader range of service lines and customer segments."
Pallecon operates mainly in Western Europe, Australia and New Zealand, providing IBC primarily for the transportation of liquids in the food, cosmetic and chemical industries. It has been operating for more than 30 years and operates a pool of approximately 180,000 IBCs worldwide.
The business generated sales revenue of €53 million in the 12 months ended 30 September 2012, with compound annual sales growth in excess of 7% over the three calendar years to 31 December 2011. Pallecon's EBITDA and EBIT margins averaged 33% and 18% respectively over the same period.
The transaction price represents a multiple of 7.4 times Pallecon's EBITDA and 11.8 times its EBIT for the 12 months ended 30 September 2012.
Pallecon's existing senior management team have agreed with Brambles to remain with the business under Brambles' ownership.
The acquisition is subject to customary conditions precedent, which Brambles anticipates will be satisfied in the first quarter of the 2013 calendar year. Brambles plans to fund the acquisition from existing bank borrowing facilities.
"While these are both businesses with exciting prospects, they lie outside CEVA's core business of non-asset based integrated supply chain solutions, primarily freight management and contract logistics," Marvin O. Schlanger, CEO of CEVA, said. "We feel that the businesses will be able to realise their full potential under the ownership of Brambles, and thank the management and staff for their contribution to CEVA."
CEVA will utilise proceeds of the sale after transaction costs for general corporate purposes. Completion is expected in first quarter 2013. (184)
