Logistics News

Brambles and HCS link for energy and chemicals containers force

Chep and Ferguson joint venture with Hoover Container Solutions to have sector’s second-largest global footprint


Brambles and Hoover Container Solutions have created a container solutions giant with an equal joint venture.

Under the deal, Brambles subsidiaries Ferguson Group and CHEP Catalyst & Chemical Containers (CCC) will combine with Hoover Container Solutions to become the Hoover-Ferguson Group (HFG).

Brambles says the agreement will create the second-largest global provider of container logistics solutions to the energy products and chemicals sectors in October.

HFG will operate under Hoover CEO Donald Young and an eight member board of directors, with equal representation from Brambles and Hoover shareholders.

Hoover Ferguson Group (HFG) will be the second-largest global provider of container logistics solutions to the Oil & Gas and Chemicals sectors, with the ability to serve customers worldwide.

“It will have a strong footprint in key global regions – including the North America, North Sea, Latin America, Middle East, Australia and South-East Asia – with 78 dedicated facilities, a fleet of more than 110,000 high-quality rental units and approximately 500 employees,” Brambles says.

“In the 12 months ended 31 December 2015 on a pro-forma basis, before synergies, HFG would have had sales revenue of US$217 million and EBITDA of US$86 million.”

Though there is no financial outlay, there will be an impact, with transaction costs of US$7 million (A$9.5 million) over this and next financial year.

“HFG is targeting annual cost and capital expenditure synergies of US$5-10 million within three years and will also seek to maximise substantial revenue opportunities related to cross selling services and products globally,” Brambles says.

“Brambles will receive consideration of approximately US$75 million from [global private equity and infrastructure investment firm] First Reserve to equalise ownership of HFG – US$40 million receivable in cash upon transaction close with the balance deferred.

“Brambles will contribute Ferguson and CCC to HFG with debt, including a US$150 million subordinated shareholder loan with a cash interest rate of 10 per cent per annum, payable quarterly.”

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