CEVA to sell intermediate bulk container business to Brambles Limited
Global third-party logistics (3PL) services provider CEVA Logistics said this week it has signed a definitive agreement with Australia-based Brambles Limited, a provider of pallet, crate and container pooling solutions through the CHEP and IFCO brands, to sell its Intermediate Bulk Container (IBC) groups, European Container Logistics and its Asia Pacific Pallecon business.
CEVA said the transactions are subject to typical closing conditions. The company added that CEVA will invest capital from these transactions, which are expected to be completed in the first quarter of 2013, for general corporate purposes.
Brambles said that the purchase price of Pallecon was$177 million. And they added that Pallecon 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 operates a pool of approximately 180,000 IBCs worldwide.
“Pallecon has outstanding customer relationships, good growth prospects and a
record of generating strong financial returns,” said Pallecon CEO Tom Gorman. “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.”
CEVA said both of these groups offer a full range of IBCs for the packaging of liquid, dry products and general security use known for innovation and design. They also each operate as a self-contained business segment, with dedicated management teams and separate systems, processes, and customers.
“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,” Marvin O. Schlanger, CEO of CEVA, said in a statement. “We feel that the businesses will be able to realize their full potential under the ownership of Brambles, and thank the management and staff for their contribution to CEVA.”
In late November, CEVA reported third quarter earnings of $1.8 billion Euro or about $2.4 billion U.S., which represented a 5.1 percent annual gain.
CEVA officials said the company’s Oceanfreight and Automotive groups showed strong growth in the third quarter, and the company also reported that it secured an estimated $532 billion Euro ($686 million U.S.) of new business. Its Freight Management (FM) group saw revenues move up 6.4 percent, and the Contract Logistics Group improved by 3.3 percent.
