Lineage Logistics has signed a definitive agreement to buy Chatham, New Jersey-headquartered Preferred Freezer Services (PFS) in a deal that is expected to close during the second quarter of 2019. While terms of the sale were not made public, the Wall Street Journal reported on February 25 that the price tag topped $1 billion.
Upon completion of the transaction, Lineage will surpass Americold Logistics to become the largest public refrigerated warehouse (PRW) company in the world, offering more than 1.3 billion cubic feet of temperature-controlled space to food producers and distributors at over 200 sites in the USA, Canada, Europe and Asia. Atlanta, Georgia-headquartered Americold, which operates approximately 928 million cubic feet of refrigerated space at 143 facilities in North America, Australia, New Zealand and Argentina, had previously ranked No. 1, according to figures compiled annually by the Global Cold Chain Alliance.
““This is clearly the game-changer,” said Greg Lehmkuhl, president and chief executive officer of Novi, Michigan-headquartered Lineage. “We are thrilled to welcome Preferred into the Lineage family of companies. Bringing their first-class management team, deep industry experience and network of strategically located facilities into our organization will enable us to provide best-in-class service for customers worldwide. We are now better positioned than ever to meet the needs – and exceed the expectations – of food customers on a truly global scale.”
PFS currently operates more than 333 million cubic feet of refrigerated space at 38 facilities from coast to coast in the United States, with the construction of two more warehouses scheduled to begin soon. The company, which employs more than 1,200 people, is also engaged in cold storage business ventures in China and Vietnam. Annual sales are in the $300 million range.
Lineage and Preferred have highly complementary real estate and customer bases, making their combination a strategic expansion into growing markets and new service offerings. The acquisition will increase Lineage’s ability to invest in next-generation technologies while making advances using the companies’ combined intellectual property.
“Joining Lineage will bring us to the next level of customer service by broadening our global reach while also significantly expanding our innovation capabilities,” said Preferred Freezer Services CEO John Galiher. “I am tremendously proud of the company we have built and longstanding customer relationships we have fostered since our founding in 1989.”
Lineage has expanded rapidly through acquisitions and organic growth since its creation in 2008. The company’s purchase of Preferred is intended to build on the success of successfully integrating complementary companies into its portfolio.
“We have followed Preferred’s impressive growth and innovations under John’s leadership since launching Lineage, and always knew that bringing these two companies together would reinforce our vision to be the most dynamic temperature-controlled company in the industry,” commented Kevin Marchetti, co-founder and managing partner of San Francisco, California-based Bay Grove, the principal investment firm backing Lineage. “This transaction will equip Lineage with the global reach and innovation capabilities that will fuel the next chapter of the company’s growth, and we are excited to have them on board.”
As part of the transaction, significant new equity was committed by existing investors, Stonepeak Partners and D1 Capital Partners.
“I’d like to thank John and the entire Preferred team for their incredible partnership,” said Peter Lamm, managing director of Fenway Partners, the equity partner and owner of PFS. “Preferred has built a tremendous platform and Fenway Partners is proud to have supported its sustained growth over the past decade. We wish both organizations great success as a combined company.”