Brambles to Spin Off Recall Document Unit Amid 21% Profit Slump
Brambles Ltd. (BXB), the world’s largest supplier of wooden pallets, will spin off its Recall document storage business amid a 21 percent fall in profits at the unit.
A shareholder vote will be held on the demerger in December with a plan to complete the transaction by the end of the year, the Sydney-based company said in a regulatory statement today. Brambles pulled a planned sale of the division in June 2012, 10 months after it started marketing the unit.
Brambles said the spin off will allow it to focus on its core business supplying shipping pallets to customers including Wal-Mart Stores Inc. and Tesco Plc. Recall’s underlying profit in the year ended June 2013 will fall to a range of $138 million to $142 million, down as much as 21 percent from $174 million last year, the company said today.
“We believe this transaction will deliver sustainable value creation opportunities for shareholders,” Graham Kraehe, Brambles’ chairman, said in the statement.
Recall received preliminary bids of as much as $2 billion from Apollo Global Management LLC (APO), Onex Corp., and Thomas H. Lee Partners LP, two people familiar with the process said in January 2012.
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