Preferred Freezer acquisition a “significant milestone” for the temperature-controlled logistics industry, buyer says
Chatham, New Jersey-based company Preferred Freezer Services, which operates a global network of temperature-controlled warehouses, is being acquired by Lineage Logistics, the second largest refrigerated storage company in the world by space, the firms announced on 25 February.
Lineage, which signed a definitive agreement to acquire Preferred on Monday, said the transaction marks a “significant milestone for the temperature-controlled logistics industry,” and would work to “set a new standard for global reach and technological advancements” for customers of both entities.
“We are thrilled to welcome Preferred into the Lineage family of companies,” said Greg Lehmkuhl, president and CEO of Lineage, in a press release. “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 offerings for customers worldwide. Lineage is now better positioned than ever to meet the needs – and exceed the expectations – of food customers on a truly global scale.”
The combined company will encompass over 1.3 billion cubic feet of temperature-controlled capacity spanning over 200 facilities across North America, Europe, and Asia, the firms said. Due to the highly complementary nature of the real estate and customer bases between Lineage and Preferred, both companies expect the acquisition to open up new market and service expansion opportunities.
“Joining Lineage will bring Preferred to the next level of customer service by broadening our global reach while also significantly expanding our innovation capabilities,” said John Galiher, CEO of Preferred. “I am tremendously proud of the company we have built and longstanding customer relationships we have fostered since founding Preferred Freezer Services in 1989. We have found the ideal partner in Lineage, and I look forward to working closely with Greg, as well as the Lineage and Bay Grove teams, to offer our expanded customer base the best services and capabilities in the industry.”
Lineage will be able to increase its ability to invest in next-generation technologies as a result of the acquisition. Once combined with Preferred, the company will have 17 automated facilities with over 800,000 automated pallet positions, including the two largest automated facilities in the world.
“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,” said Kevin Marchetti, Co-Founder and Managing Partner of 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.”
“I’d like to thank John and the entire Preferred team for their incredible partnership,” added Peter Lamm, Managing Director of Fenway Partners, Preferred’s equity partner and owner. “Preferred has built a tremendous platform under the management team’s leadership and, on behalf of Fenway Partners, I am proud to have supported its sustained growth over the past decade. We wish both organizations great success as a combined company.”
The financial terms of the acquisition were not disclosed, however, as part of the transaction, significant new equity was committed by existing investors, Stonepeak Partners and D1 Capital Partners, the companies said. The acquisition is expected to be finalized by the close of the second quarter in 2019, subject to customary closing conditions and regulatory approvals, stated the joint press release.
Morgan Stanley & Co. LLC acted as financial advisor to Lineage for the merger, and Latham & Watkins LLP served as legal advisor to Bay Grove and Lineage. Meanwhile, UBS Investment Bank acted as financial advisor to Preferred, with Ropes & Gray LLP serving as legal advisor.
Founded in 2008, Lineage operates as a leading innovator in temperature-controlled supply chain and logistics, with expertise in end-to-end logistical solutions. It was recognized as the No 1. Data Science company on Fast Company’s Annual list of The World’s Most Innovative Companies in 2019.
Preferred Freezer, which was founded in 1989, is dedicated to designing, constructing, and operating state-of-the-art warehouses. It has locations in ocations throughout the United States with facilities in New York/New Jersey, California, Florida, Georgia, Illinois, Massachusetts, Pennsylvania, Texas, Virginia, and Washington state, with additional international locations in China and Vietnam.