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UPDATE 1-Australia's Brambles to buy IFCO for 923 mln euros

Published 11/14/2010, 06:35 PM
Updated 11/14/2010, 06:40 PM

* Offer for IFCO at 13.504 euro a share

* Brambles set to buy 95.9 pct, then enact minority buy-out

* IFCO seen immediately earnings accretive

* U.S., European regulatory clearance seen taking 9 months

* Private-equity firm Apax to sell 93.4 pct IFCO stake

By Miranda Maxwell

MELBOURNE, Nov 15 (Reuters) - Brambles Ltd, the world's top pallet supplier, will pay 923 million euros ($1.3 million) for German-listed IFCO Systems, maker of reusable plastic containers for transporting fresh produce.

Brambles will fund the acquisition with debt as well as a A$110 million ($108.4 million) issue of new Brambles shares to existing shareholders, at a 2.5 percent discount to market value, the firm said on Monday. The share issue would be underwritten.

Amsterdam-based IFCO Systems operates in more than 210 locations and also sorts, repairs and reissues pallets in the United States, where it is the market leader in this service.

In 2009, IFCO had sales of $736 million.

"IFCO is a natural fit with Brambles' existing RPC (reusable plastic containers) 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," Brambles Chief Executive Tom Gorman said in a statement.

Brambles said it would combine its CHEP pallet business with IFCO over time, creating a global business for reusable plastic containers, with a broad base in Europe and a foothold in the fast-growing markets of the Americas.

IFCO's pro forma profit before interest and tax were expected to be $115 million for the year to June 2011, Brambles said.

The acquisition would be add around 5 percent to earnings per share in the year to June 2011, it added.

Brambles has entered into binding agreements to buy 95.9 percent of IFCO for 13.50 euros a share, with 93.4 percent coming from Apax Partners.

The total enterprise value of 923 million euros comprises 696 million euros in equity and net debt of 227 million euros.

In a trading update, Brambles also said it was on track for operating profit before interest and tax of $740-780 million for 2010-11.

Sales for the four months to October rose 2 percent, with sales volumes growing in all four of its business units. (Editing by Mark Bendeich)

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