Tuesday, December 18, 2012

Freight and Logistics Group Sell Bulk Container Businesses

Australian Group Buy Local and European Interests
Shipping News Feature

AUSTRALIA – NEW ZEALAND - EUROPE – Freight and supply chain support group, Ceva Logistics, has announced the sale of both its CEVA Pallecon European container logistics business and its Asia Pacific Pallecon business to Australian company Brambles Limited for €135 million. Both subsidiaries provide a full range of intermediate bulk container’s (IBC) for the packaging of liquid, dry products and general security use. Marvin O. Schlanger, Chief Executive Officer of Ceva, said.

“While these are both businesses with exciting prospects, they lie outside Ceva’s core business of non-asset based integrated supply chain solutions, primarily freight management and contract logistics. We feel that the businesses will be able to realise their full potential under the ownership of Brambles, and thank the management and staff for their contribution to Ceva.”

The Pallecon brand operates mainly in Western Europe, Australia and New Zealand, providing IBCs primarily for the transportation of liquids in the food, cosmetic and chemical industries. It has been operating for more than 30 years and controls a pool of approximately 180,000 IBC’s worldwide.

With business generated sales revenue of €53 million in the year ended 30th September 2012, and with compound annual sales growth in excess of 7% over the three calendar years to 31st December 2011, Pallecon’s EBITDA and EBIT margins averaged 33% and 18% respectively over the same period. The transaction price represents a multiple of 7.4 times Pallecon’s EBITDA and 11.8 times EBIT for the 12 months to 30th September 2012. Brambles CEO Tom Gorman said:

“Pallecon has outstanding customer relationships, good growth prospects and a record of generating strong financial returns. It will complement our plans to grow our IBC operations worldwide, in line with our strategy of expanding our pooling solutions operations into a broader range of service lines and customer segments.”

Pallecon’s existing senior management team have agreed with Brambles to remain with the business under Brambles’ ownership. The acquisition is subject to customary conditions precedent with Brambles anticipating the approval of the relevant authorities in the first quarter of the 2013 calendar year. Brambles plans to fund the acquisition from existing bank borrowing facilities.