GRAND RAPIDS, Mich. - UFP Industrial LLC has announced plans to acquire PalletOne Inc. for approximately $232 million. UFP also agreed to pay $18 million for PalletOne’s recent capital expenditures.
UFP Industrial is a subsidiary of UFP Industries. The transaction is subject to a net working capital adjustment and is expected to close on Dec. 28, pending customary closing conditions and regulatory approval. The purchase price will be funded using the company’s cash reserves, which currently total more than $400 million.
Based in Bartow, Florida, PalletOne is a leading U.S. manufacturer of new pallets, with 17 manufacturing facilities in the southern and eastern regions of the country. The company also supplies other specialized industrial packaging, including custom bins and crates, and its Sunbelt Forest Products subsidiary operates five pressure-treating facilities in the Southeastern United States. PalletOne and its affiliates had 2019 sales and adjusted EBITDA of $525 million and $37 million, respectively, and trailing 12-month sales and adjusted EBITDA through October 2020 of $672 million and $44 million, respectively, according to a statement from UFP Industries.
PalletOne's management team, including President Howe Wallace, will continue to lead the company.
“We are excited to welcome PalletOne and its 1,500-plus employees to the UFP family of companies,” said Matthew J. Missad, CEO of UFP Industries. “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 U.S.”
“This is a great opportunity for all of us at PalletOne,” Wallace said. “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." He added, "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.”
The PalletOne acquisition marks the sixth and largest of the year for UFP Industries, Missad said. Previous acquisitions include New Hampshire-based Atlantic Prefab Inc., Exterior Designs LLC; and Patriot Building Systems LLC in November, California-based T&R Lumber Co. and its affiliates, Sullivan & Mann and Kelmar Creation in July and Texas-based Quest (Quest Design & Fabrication and Quest Architectural Millwork) in March.
Formerly Universal Forest Products, Inc., the company officially changed its name to UFP Industries (NASDAQ: UFPI) in January.
UFP Industries is a holding company whose operating subsidiaries – UFP Industrial, UFP Construction and UFP Retail Solutions – manufacture, distribute and sell a wide variety of wood- and alternative material-based building and industrial products worldwide. Founded in 1955, the company is headquartered in Grand Rapids, Michigan, with affiliates in North America, Europe, Asia and Australia.
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