Wolfgang Orgeldinger, file photoSydney – 25 February 2019: Brambles has announced entering into a binding agreement to sell its IFCO reusable plastic containers (RPC) business to Triton and Luxinva (a wholly-owned subsidiary of the Abu Dhabi Investment Authority) for an enterprise value of US$2.51 billion. According to a news report, the buyout group Triton outbid other suitors including EQT, Pamplona, PAI and Brookfield. According to another report, buyers were advised by Bank of America Merrill Lynch and the seller by Goldman Sachs and UBS, with bankers from London and Australia spending the weekend to finalize the transaction.
The transaction is subject to customary regulatory approvals and is expected to be completed during the second quarter of the calendar year 2019. Brambles’ Chairman Stephen Johns said: “In August 2018, we announced that we would seek to separate IFCO through either a demerger or a sale by way of a dual track process. As well as progressing the demerger option, a robust and competitive sale process generated strong interest. We are pleased today to announce the sale of IFCO which we believe delivers greater value for shareholders, including a significant return of cash proceeds to shareholders.
“The IFCO team has been an important and valued part of the Brambles business, and on behalf of the Board, I’d like to thank them for their contribution over the past eight years. The interest shown in IFCO during the separation process is testimony to how highly appreciated the IFCO business is, and we wish Wolfgang Orgeldinger and his team every success in the future,” Stephen said.
Brambles’ CEO Graham Chipchase said: “The sale will allow Brambles to focus on our strategic priorities and to pursue continued revenue growth within our core markets, while also reviewing additional opportunities in emerging markets, through product and service innovation and use of technology through the supply chain. Our ambition remains to lead the platform pooling industry in customer service, innovation and sustainability”. In FY18, IFCO generated revenues of $1.1 billion, EBITDA of $248 million and Underlying Profit of $133 million. Brambles expects to receive approximately $2.36 billion of net cash proceeds from the transaction, after taxes, transaction costs, and balance sheet items, subject to customary closing adjustments.
Brambles first announced its intention of purchasing IFCO in November 2010 for a purchase price of $1.255 billion. At the time, then Brambles CEO Tom Gorman said: “The purchase of IFCO represents a unique opportunity for Brambles to enhance its position as a leading pooling solutions provider and acquire operations with a strong growth profile. IFCO is a natural fit with Brambles’ existing RPC and pallet businesses and will allow us to continue to deliver on our strategy of diversifying our revenue base by product platform, geography and customer type.”