UFP Industries (formerly Universal Forest Products) purchased PalletOne, Inc. for approximately $232 million. UFP also agreed to pay $18 million for PalletOne’s recent capital expenditures. The transaction is expected to close on December 28 and the purchase price will be funded using UFP’s cash reserves, which currently total more than $400 million, according to a news release.
Bartow, Fla.-based PalletOne is a manufacturer of new pallets in the United States, with 17 pallet manufacturing facilities in the southern and eastern regions of the country. PalletOne 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 region of the United States.
“We are excited to welcome PalletOne and its 1,500-plus employees to the UFP family of companies,” Matthew Missad, CEO of UFP Industries, said in a prepared 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 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 preserved in the U.S.”
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 news release. The PalletOne management team, including president Howe Wallace, will continue to lead the company after the transaction is completed.
“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 provider our customers with more value.”
The acquisition of PalletOne is the sixth, and largest, acquisition of the year for UFP. Grand Rapids, Mich.-based Universal Forest Products Inc. (UFPI) rebranded as UFP Industries on January 1, 2020, reorganizing itself based around the markets it serves rather than geography. The company said the rebranding would allow a more specialized and consistent sales approach, a more efficient use of resources, and a quicker introduction of new products and services.
