Brambles Buys Wal-Mart Crate Manager Ifco for $954 Million; Shares Surge
Brambles Ltd. offered 696 million euros ($950 million) for Ifco Systems NV to add plastic containers used for shipping fruit and vegetables by companies including Wal-Mart Stores Inc. and Metro AG.
The bid is valued at 13.50 euros per share, Sydney-based Brambles said today in a statement. That’s 20 percent more than Ifco’s closing price on Nov. 12. Island International Investment LP, majority owned by funds advised by Apax Partners LLP, said separately that it agreed with other investors to sell a combined 96 percent stake in Ifco.
Brambles surged the most in almost three months in Sydney trading after saying the purchase of Ifco will boost sales 16 percent. The company, operator of the world’s largest pallet pool, also said it’s “on track” to meet its profit forecast. Ifco rose the most in more than 11 months in Frankfurt trading.
The acquisition “will enhance the company’s competitive position and optimize its network of pallet-service centers,” Standard & Poor’s said today in a statement. The credit rating company said Brambles’ BBB+ rating with a stable outlook is “unaffected” by the Ifco bid.
Brambles jumped 5.4 percent to A$6.88 in as of the 4:10 p.m. close of trading. The acquisition is the company’s largest since Tom Gorman took over as chief executive officer 12 months ago. In September, the company agreed to buy Unitpool AG, which runs a pooling system for air-cargo containers.
Ifco’s Pallets
Ifco, which has its headquarters in Amsterdam, jumped as much as 2.19 euros, or 19 percent, to 13.44 euros, the biggest intraday gain since Jan. 7, and was up 18 percent as of 10:18 a.m. in Frankfurt.
The Dutch company also repairs and rents out wooden pallets used to move and store goods in addition to its fruit and vegetable containers. Ifco operated a pool of 112 million plastic produce containers as of Sept. 30, up from 102 million units as of the end of last year, Sabine Preiss, a spokeswoman in Munich, said today.
Brambles, whose blue wooden pallets use the Chep brand, will fund the 50 percent of the transaction with debt from existing facilities and the other 50 percent with stock, including dividend reinvestments and A$110 million ($108 million) in the sale of new shares to current investors.
The Australian company is paying 7.2 times Ifco’s forecast earnings before interest, tax, depreciation and amortization in the year ending June 2011, according to a separate statement.
Buyers of packaging and containers businesses in the past five years have paid a median multiple of 6.8 times Ebitda, according to data compiled by Bloomberg. UBS AG is advising Brambles.
Brambles’ Forecast
The company reiterated today that it expects profit before interest, tax and acquisition costs totaling $740 million to $780 million in the 12 months through June 2011.
Chep Americas posted revenue growth of 4 percent to $530 million in the four months ended Oct. 31. In Europe, the Middle East and Africa, sales fell 3 percent to $496 million amid declines in the euro and British pound.
Sales in the Asia-Pacific region rose 12 percent to $140 million, the company said today.
To contact the reporters on this story: Robert Fenner in Melbourne at rfenner@bloomberg.net; Richard Weiss in Frankfurt at rweiss5@bloomberg.net.
To contact the editors responsible for this story: Neil Denslow at ndenslow@bloomberg.net; Benedikt Kammel at bkammel@bloomberg.net.
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