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Brambles to Spin Off Document Business Amid 21% Profit Drop

July 2 (Bloomberg) -- Brambles Ltd., the world’s largest supplier of wooden pallets, plans to sell its Recall document-storage business amid a 21 percent drop in profit at the unit. The stock rose the most in a month.

A shareholder vote will be held on the sale in December, and the Sydney-based company plans to complete the transaction by the end of the year, it said in a regulatory statement today. Brambles canceled a planned sale of the division in June 2012, 10 months after it started marketing the unit.

Brambles said today that the sale will allow it to focus on the main business of supplying shipping pallets to customers including Wal-Mart Stores Inc. and Tesco Plc. Recall’s underlying profit in the 12 months ended June 2013 probably fell to a range of $138 million to $142 million, down as much as 21 percent from $174 million a year earlier, the company said.

“We believe this transaction will deliver sustainable value creation opportunities for shareholders,” Brambles Chairman Graham Kraehe said in the statement.

Brambles rose 3 percent, the most since May 29, to close at A$9.35 in Sydney, compared with a 2.6 gain in the benchmark S&P/ASX 200 index.

In the last sale attempt, Recall received preliminary bids of as much as $2 billion from Apollo Global Management LLC, Onex Corp., and Thomas H. Lee Partners LP, two people familiar with the process said in January 2012.

To contact the reporter on this story: David Fickling in Sydney at dfickling@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net

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