In an M&A deal with a direct focus on cold chain logistics, Novi, Mich.-based Lineage Logistics, the largest global temperature-controlled logistics services provider, said it has inked definitive agreements to acquire Dallas-based Emergent Cold, a leading cold chain services and temperature-controlled services provider.
Financial terms of this deal were not made public by Lineage, but a Wall Street Journal report, citing “a person familiar with the sale,” indicated the sale price was more than $900 billion. Lineage said that this deal is expected to close in 2020 and is subject to customary closing conditions and regulatory approvals.
Lineage officials said that this deal will augment its leading United States port presence, as well as highlight the company’s entrance into the Australian, New Zealand, and Sri Lankan temperature-controlled logistics markets and leverage the company’s existing presence in the Asia-Pacific region.
Established in 2017, Emergent was founded by investment fund manager Eilliott Management and Emergent CEO and Founder Neal Rider. Emergent is the market leader in Australia and has capacity for more than 300,000 pallets in more than 75 million cubic square feet of temperature-controlled space. And it is also a leading service provider in Vietnam, with capacity for more than 40,000 pallets in Ho Chi Minh City and Hanoi.
“Food producers, manufacturers and retailers are looking for cold chain partners who can offer a dynamic and truly end-to-end temperature-controlled logistics solution, and one that can reach every corner of the world,” said Greg Lehmkuhl, President and Chief Executive Officer of Lineage, in a statement. “Welcoming Emergent to the Lineage family not only adds significant capacity to our international footprint, but also deepens our commitment to our port strategy and international trade. We are better able to help customers respond to constantly shifting market dynamics, such as global network optimization, tariff impacts, consumer preference shifts, and much more, while at the same time unlocking new potential market opportunities to sell their goods.”
When this transaction becomes official, Lineage said that the combined company will be comprised of more than 1.7 billion cubic feet of temperature-controlled capacity across 260 facilities in ten countries, with a global footprint that spanning North America, Europe, Asia, Australia and New Zealand. And it added that through this acquisition, Lineage adds a newly constructed distribution center in the Dallas-Fort Worth market, in addition to four U.S. port facilities in New Orleans, Houston and Charleston, which supports import, export and customs brokerage services for its customers. What’s more, Lineage said that the transaction also includes the purchase of real estate at select facility sites currently leased by Emergent under long-term lease agreements.
With Emergent soon to be part of Lineage upon completion of the deal, Lineage said it will position the company to take advantage of growing demand for cold storage space in Australia – a sector valued at $5 billion – and in neighboring New Zealand, Vietnam and Sri Lanka. The company said that the sector is rapidly evolving and is an integral part of Asia-Pacific’s domestic and international supply chains for food products including dairy, seafood, raw and cooked meat, poultry, frozen vegetables and other frozen or chilled foods.
“Once the deal closes, Lineage will be poised to help customers meet growing export demand and their need for a more expansive supply chain,” the company said.
Neal Rider, Emergent’s founder and Chief Executive Officer, said in a statement that Emergent joining Lineage accelerates the company’s goal of providing the highest quality global cold chain solutions to its customers.
“Lineage has established itself as a leader in our industry, and expanding its global footprint and port presence with the addition of Emergent will create incredible opportunities for our collective customers,” he said.
The WSJ report noted that this is the most recent example how Lineage Logistics has grown through acquisition, as the company has made almost 40 acquisitions going back to its 2008 inception, adding that earlier this year Lineage acquired Preferred Freezer Services LLC, a Chatham, New Jersey-based provider of full service temperature-controlled warehouses, for more than $1 billion.
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