GRAND RAPIDS — Worldwide wood products supplier UFP Industries Inc. plans to expand its industrial packaging capabilities through the upcoming acquisition of Florida-based pallet manufacturer PalletOne Inc.
Grand Rapids-based UFP Industries said Thursday that its board of directors approved an agreement to purchase 100 percent of the equity in PalletOne for $232 million. Under the agreement, UFP Industries also agreed to pay $18 million in recent capital expenditures for PalletOne.
PalletOne operates 17 manufacturing facilities throughout the southern and eastern regions of the country, making it a top U.S. manufacturer of new pallets. PalletOne also manufactures a variety of other specialized industrial packaging solutions, such as bins and crates.
The existing PalletOne 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,” UFP Industries CEO Matthew Missad said in a statement. “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.”
PalletOne and its affiliates recorded $525 million in sales for 2019 with adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $37 million.
UFP Industries dipped into its more than $400 million of cash reserves to fund the purchase. The two sides are expected to close out the deal by the end of the month.
Last month, UFP Industries made an equity investment in Milan, Italy-based Enwrap Logistic & Packaging S.r.l, which also specializes in industrial packaging. The deal allowed UFP Industries to establish a foothold in Europe.
In early October, UFP Industries acquired North Carolina-based Fire Retardant Chemical Technologies LLC, a leading research and development company specializing in wood treating technologies such as fire retardants.