Australian pallet maker Brambles Ltd. plans to buy IFCO Systems NV from London-based buyout firm Apax Partners for 923 million euros ($1.3 billion).
According to a Nov. 15 news release from Sydney-based Brambles, the deal, funded in equal parts equity and debt, is for 7.2 times Amsterdam-based IFCO's forecast earnings before interest, taxes, debt and amortization for the year ending June 30, 2011.
Brambles plans to offer 13.50 euros ($18.37) per share of IFCO stock.
“IFCO is a natural fit with Brambles' existing [reusable plastic container] and pallet businesses and will allow us to continue to deliver our strategy of diversifying our revenues base by product platform, geography and customer type,” Brambles CEO Tom Gorman said in the release.
The deal is subject to U.S. and European regulatory approval; Brambles expects to close within nine months.
According to the release, Brambles will keep IFCO senior management in place through June 2014. IFCO had no comment on the acquisition.
Brambles officials said they expect to gain from IFCO's global pool of 112 million reusable plastic containers, used for transportation, protection and display of fresh produce. Also, the release said IFCO's wood pallet operation collects and reissues 200 million pallets annually in the U.S.
For 2009, IFCO reported sales of $735.9 million. It employs 4,000 at 210 locations in 23 countries.
IFCO on Nov. 11 reported third-quarter profit of $11 million on $200 million in sales, compared to profit of $7.6 million on sales of $186.6 million for the year-ago period. For the 12 months ended Sept. 30, the firm said it realized profit of $33 million on $778 million in sales.
Ratings agency Standard and Poor's said the purchase would enhance Brambles' competitive position and improve the company's debt-to-earnings ratio.
For the fiscal year ended June 30, Brambles reported profit of $443.9 million on sales of $4.1 billion, a 3 percent increase over the prior year.
Brambles employs about 12,000 in more than 45 countries and had total assets of $5.2 billion as of the end of 2009.