CEVA Logistics will sell its Pallecon business, an intermediate bulk container (IBC) services provider with operating divisions in Europe and Asia-Pacific, to Brambles Ltd. of Australia for $177 million.
Pending approval, CEVA expects the transaction to close in the first quarter of 2013.
According to a Brambles press release, it will fund the purchase from bank-borrowing facilities. Pallecon’s management team will stay in place under the new ownership.
“Pallecon has outstanding customer relationships, good growth prospects and a record of generating strong financial returns,” Brambles Chief Executive Officer Tom Gorman said in a statement. “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.”
A 30-year-old operation, Pallecon operates 180,000 IBCs worldwide, dealing mostly with the transportation of food, chemical and cosmetic liquids. Pallecon’s fiscal-year 2012 revenues reached 53 million euros, according to Brambles.
In a separate statement, CEVA officials said they plan to use the proceeds of the sale for general corporate purposes. CEVA saw the two divisions of Pallecon as two separate entities — European Container Logistics and Asia Pacific Pallecon — and pointed out that they operated within CEVA as self-contained companies.
“While these are both businesses with exciting prospects, they lie outside CEVA’s core business of non-asset based integrated supply chain solutions,” said CEVA’s CEO Marvin O. Schlanger in his company’s statement. “We feel that the businesses will be able to realize their full potential under the ownership of Brambles.” -Jon Ross