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May 14, 2019 4:15 PM, EDT

Cold-Supply Logistics Companies in Hot Pursuit of Acquisitions

Americold sign On May 1, Americold Realty Trust bought Lanier Cold Storage of Gainesville, Ga., for $82 million, according to an Americold news release. (TT file photo)

Cold-storage logistics companies are seizing opportunities to expand, with at least two major U.S. companies in the sector snapping up properties of late.

On May 1, Americold Realty Trust bought Lanier Cold Storage of Gainesville, Ga., for $82 million, according to an Americold news release. It was the third acquisition this year for Atlanta-based Americold, a real estate investment trust dedicated to temperature-controlled warehouses.

On April 30, Minnesota-based Twin Express Inc. purchased TBI Inc., a Sioux Falls, S.D., trucking firm, marking the company’s fourth acquisition in the temperature-controlled logistics space.

Twin Express logo

The back-to-back acquisitions bring change to an industry that is both lucrative and resistant to shifts in the economy, an expert said.

“[Cold supply chain] is going to be less cyclical than other sectors,” said Mark D’Amico, senior research analyst of SJ Consulting Group in Warrendale, Pa. “It’s a little bit more resistant to recession.”

The simple reasons for that are food, drink and medicine, D’Amico said, staples that people need even in weak economic times.

With the Lanier acquisition, Americold picks up two temperature-controlled storage facilities that provide more than 14 million refrigerated cubic feet and approximately 51,000 pallet positions, Americold said.

The facilities located in Gainesville and Lula, Ga., are served by major highways and railways and are designed to supply poultry and other products to markets across the United States, the company added.

Americold already has an existing Gainesville facility with 3.8 million refrigerated cubic feet.

Americold on May 7 reported that its first-quarter revenue rose 0.5% to $393.1 million, but reported a net loss of $4.6 million, or 3 cents per common share. That compared with a net loss of $8.6 million in the same quarter last year. The company said the 1Q loss included the impact of approximately $12.6 million in charges stemming from the redevelopment of an existing Atlanta facility and the potential future sale of an idle facility during the second quarter of the year.

Americold officials said net income is not a primary metric for real estate investment trusts. Funds from operations (FFO) or adjusted funds from operations are two metrics investors generally focus on, Americold spokeswoman Robbyn Ingram told Transport Topics.

The company reported FFO were $39.9 million, or 26 cents per common share, compared with $34.8 million in the same quarter last year. Adjusted funds from operations were $44.3 million, or 29 cents per diluted common share, compared with $39.9 million in the same quarter last year.

CEO Fred Boehler said the fundamentals within the industry remain “extremely favorable.”

For the first quarter, occupancy for the company’s total warehouse segment was 78.8%.

Americold is the largest owner of temperature-controlled warehouses, according to the company. It owns and operates 179 sites worldwide with more than 1 billion cubic square feet of storage. The company went public in January 2018 and ranks No. 17 on the Transport Topics Top 50 list of largest logistics companies in North America.

TBI serves the continental United States with full truckload refrigerated and dry-van shipments, according to a Twin Express news release. TBI’s refrigerated trailers enable shippers to have single, dual or triple temperatures within one trailer.

Dan Eberhardt, managing director of Eberhart Capital

Eberhardt

Twin Express is based in Rogers, Minn., and is a temperature-controlled carrier company. It is owned by Eberhart Capital, a private equity firm in Scottsdale, Ariz.

Dan Eberhart, managing director of Eberhart, said in a statement that the TBI acquisition will help Twin Express expand operations into such industries as meat packing, processed food and paper goods.

Twin Express has more than 100 trucks and also employs 200 owner-operators.

The combined companies will run about 15 million miles of freight annually, according to Twin Express.