Major cold storage operator in Australia has massive new parent
Emergent Cold may have busied itself in Australia recently swallowing temperature-controlled storage and logistics operations but its and its owners’ efforts had not gone unnoticed by the biggest fish in this global pond.
So it is that US behemoth Lineage Logistics Holdings, counted as having the most refrigerated storage space worldwide, has signed a deal to buy Emergent from its hedge-fund owner, Elliott Management Corporation.
The deal is reportedly worth US$900 million (A$1.23 billion) and marks Lineage’s entry into the Australian, New Zealand, and Sri Lankan markets.
“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,” Lineage president and CEO Greg Lehmkuhl says.
“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.”
Following closing of the transactions, the combined company will feature more than 1.7 billion cubic feet of temperature-controlled capacity across 260 facilities in 10 countries, with a global footprint that now spans North America, Europe, Asia, Australia and New Zealand.
Emergent Cold presently has 75 million cubic feet.
“In less than two years, we were able to acquire seven high-performing businesses and launch two greenfield facilities across six countries and four continents, while driving significant top and bottom line improvement across our operations,” Elliott Management associate portfolio manager Cody Kittle says.
Read how Emergent got the go-ahead to buy Oxford Cold storage, here
What this means for an Australian market sector that Lineage values at A$7.36 billion and that has one of its biggest transport and logistics operators, AP Eagers-owned Automotive Holding Group’s Refrigerated Logistics division, on the market is yet to be seen.
But Lineage is generally acquisitive, having bought two facilities in the Netherlands and Belgium from Van Soest Coldstores in September, US firm Preferred Freezer Services in July and British firm Yearsley Group last December.
It notes the region it now enters “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.”
Comment has been sought from Lineage on whether it has any further intentions in Australia.