The world's largest reusable plastic container supplier is being sold in a multibillion-dollar deal.
Brambles Ltd. is divesting its IFCO brand RPC business after nearly a decade of ownership, a move that will provide a windfall for the company's shareholders.
The sale price is $2.51 billion, and Sydney, Australia-based Brambles expects to receive $2.36 million in net cash proceeds through the divestiture.
Of that total, some $1.95 billion will go toward efforts designed to benefit shareholders. That includes $300 million in direct payments to stockholders on a per share basis as well as $1.65 billion in share buyback efforts.
The remaining money will go toward debt reduction, the company said.
Brambles acquired IFCO in 2010 from private equity firm Apax Partners. The new owners are German private equity firm Triton and Luxinva, an investment firm owned by the Abu Dhabi government.
Brambles, in selling IFCO, wants to concentrate its efforts on the company's CHEP business, which provides wooden, plastic and display pallets and logistical services in dozens of countries. CHEP reusable wooden pallets are easily identifiable thanks to being painted blue.
Brambles indicated last summer that it was looking to move on from IFCO.
“The interest shown in IFCO during the separation process is testimony to how highly appreciated the IFCO business is,” Brambles Chairman Stephen Johns said in a statement. “A robust and competitive sales process generated strong interest.”
IFCO posted sales of $1.1 billion during the company's 2018 fiscal year, with earnings before interest, taxes, depreciation and amortization of $248 million.
IFCO RPCs typically transport fresh food in the Americas, Europe and Asia.
Brambles will continue to own an RPC business in Australia, New Zealand and South Africa. The company also will remain involved in plastic pallets.
While both CHEP and IFCO operate using “pooling” – which distributes and then collects pallets and containers for reuse, Brambles has said the two portions of the company have “no meaningful overlap or customer-related synergies.”
The operations “are distinct businesses with different financial profiles and customer propositions,” Brambles has said.
Brambles has made investments in IFCO over the years to expand operations, market share and competitive position, the company said. “It is well positioned for its future as an independent company with a singular focus,” CEO Graham Chipchase previously said.
IFCO, with customers in more than 50 countries, has an estimated 290 million RPCs in circulation around the world. The company has capacity to make 50 million new RPCs each year.
Sales and acquisitions in the RPC business are nothing new to Brambles, which previously sold its RPC portion of CHEP in the United States to IFCO Systems in 2006 before later buying IFCO completely.
Triton, just last fall, also acquired a majority stake in Norres Group, a plastic hose maker based in Gelsenkirchen, Germany. Norres has production sites in Germany, South Bend, Ind., and Shanghai, China.