GRAND RAPIDS, Mich. (News release) -- UFP Industries announced that its Board of Directors approved an agreement for UFP Industrial, LLC, to purchase 100% of the equity of PalletOne, Inc. for approximately $232 million. This price assumes a cash-free, debt-free balance sheet. UFP also agreed to pay $18 million for PalletOne's recent capital expenditures.
The transaction is subject to a net working capital adjustment and is expected to close on December 28, 2020, pending customary closing conditions and regulatory approval. The purchase price will be funded using the company's cash reserves, which currently total more than $400 million.
The PalletOne management team, including President Howe Wallace, will continue to lead the company.
Based in Bartow, Florida, PalletOne is a leading manufacturer of new pallets in the U.S., with 17 pallet manufacturing facilities in the southern and eastern regions of the country. The company 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 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.
UFP Industries is a holding company whose operating subsidiaries - UFP Industrial, UFP Construction and UFP Retail Solutions - manufacture, distribute and sell a wide variety of wood- and alternative material-based building and industrial products worldwide.
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