With the acquisition of PalletOne, UFP Industries is expected to expand its industrial packaging capabilities in the US
UFP Industries, previously known as Universal Forest Products, has agreed to acquire packaging and containers company PalletOne for around $232m.
Apart from the total consideration, UFP has also agreed to pay $18m for PalletOne’s recent capital expenditures.
The company intends to fund the purchase price using its existing cash reserves, which currently amounts to a total of more than $400m.
With the acquisition of PalletOne, UFP Industries is expected to expand its industrial packaging capabilities in the US.
As part of the transaction, PalletOne’s management team is planned to continue the operations, under the leadership of president Howe Wallace.
Wallace said: “This is a great opportunity for all of us at PalletOne. As a strategic addition to UFP’s leading industrial business unit, we will have access to new markets, value-added industrial products, and resources that will help us grow our business and provide our customers with more value.
“Because UFP is committed to developing its employees and promoting from within, PalletOne employees will have new opportunities to grow their careers as well. We’re eager to take advantage of these exciting new possibilities.”
Established in 2001, PalletOne is engaged in manufacturing of new pallets, and providing pallet repair programmes, recycles used pallets and producing several other wood products.
The company’s subsidiaries include – Sunbelt Forest Products, which produces pressure-treated lumber and residential fencing and SunOne Logistics, which operates as a Southeast regional truckload carrier.
The company also supplies other specialised industrial packaging products, including custom bins and crates, with 17 pallet manufacturing facilities in the US.
Last year, PalletOne and its affiliates had reported sales and adjusted EBITDA of $525m and $37m, respectively.
UFP Industries CEO Matthew J Missad said: “We are excited to welcome PalletOne and its 1,500-plus employees to the UFP family of companies. PalletOne is a leader in automation for pallet manufacturing, which we can scale across our existing footprint.
“They also have exceptional sourcing and design personnel who will help us gain synergies in those areas of the combined businesses. PalletOne brings a strong brand, a new customer base, and operating excellence, which drive us closer to our goal of becoming the preferred global packaging solutions provider and preferred wood preserver in the US.
“PalletOne represents our sixth and largest acquisition of the year as we pursue our commitment to effectively deploy capital to high-return opportunities that strategically expand our capabilities and geographic reach.”
The transaction, subject to customary closing conditions and regulatory approval, is expected to be closed on 28 December this year.