Brambles, the world's biggest supplier of wooden freight pallets, is buying IFCO Systems, the largest provider of reusable plastic containers, for around $1.3 billion.
The Australian logistics company said it will combine Netherlands-based IFCO with its U.S.-based CHEP reusable plastic container business to create a global operation with a broad base in the U.S. and Europe.
IFCO, which is listed on the Frankfurt stock exchange, has a rental pool of around 112 million Reusable Plastic Containers, which are used primarily to transport fresh produce from farmers to leading grocery retail chains like Wal-Mart.
By The Numbers: U.S. Exports of Fresh Produce.
"IFCO is a natural fit with Brambles' existing RPC and pallet businesses and will allow us to continue to deliver on our strategy of diversifying our revenue base by product platform, geography and customer type," said Brambles chief executive Tom Gorman.
RPCs, which currently contribute around 3 percent to Sydney-based Brambles' revenue, will rise to 13 percent of sales following the acquisition of IFCO, which is subject to regulatory approvals.
IFCO, which is 95.9 percent owned by Island International Investment Limited Partnership, had revenue of $735.9 million in 2009.
IFCO also operates a Pallet-Management Services business in the U.S. with almost 200 million wood pallets making the Houston-based unit the domestic industry leader with a market share of around 13 percent.
Gorman said IFCO's U.S. non-pooled white wood pallet operation would complement CHEP's existing pallet pooling services, allowing Brambles to broaden its service offering and more effectively target small-to-medium size customers.
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