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December 5, 2019 4:15 PM, EST

Lineage Acquires Emergent Cold as Refrigerated Supply Heats Up

Loading docks at the Sunnyvale, Texas, Lineage Logistics facility. (Lineage Logistics)

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Lineage Logistics Holdings said it will acquire Emergent Cold in the latest consolidation of cold-storage companies that do business globally.

Lineage, which the International Association of Refrigerated Warehouses ranks as the largest cold storage company in the world, said in a Nov. 18 news release that the acquisition is expected to close in 2020 after regulatory approvals. Terms of the deal were not disclosed.

Dallas-based Emergent was founded as an entity in 2017 by Elliott Management and businessman Neal Rider, who serves as CEO of Emergent.

Lineage Logistics logo

The company now becomes the latest acquisition for Lineage, a Novi, Mich.-based company that has been expanding its footprint by buying other companies focused on cold storage.

According to IARW, Lineage had 1.5 billion cubic feet of refrigerated storage space before the purchase. Lineage said in the release that the deal will put it at 1.7 billion cubic feet of capacity across 260 facilities in 10 countries in North America, Europe, Asia, Australia and New Zealand.

It’s been a busy year in the cold-storage sector. On May 1, Americold Realty Trust, the world’s second-largest cold storage company, announced that it had purchased Lanier Cold Storage of Gainesville, Ga., for $82 million. It was the third acquisition at the time for Atlanta-based Americold, a real estate investment trust dedicated to temperature-controlled warehouses.

The trend is likely to continue, according to Cushman and Wakefield, a major U.S. commercial real estate firm. In an October report, “Niche Assets: Well-Positioned for Growth,” Cushman and Wakefield officials said growing urban incomes in the United States will mean a greater demand for cold food such as meats and yogurt.

“Urban populations rely on long supply chains to meet their needs,” the report said. “This is particularly true of temperature-sensitive goods. Growing urban populations combined with rising urban incomes point to accelerating demand for cold storage capabilities. Proliferation of consumer tastes (e.g. yogurt, craft beer) and a rising preference for fresh foods also lead to higher cold storage needs.”

Those higher-value refrigerated items could also include meat, pharmaceuticals and beverages, according to Lowell Randel, vice president of government and legal affairs at the Global Cold Chain Alliance, a trade group based in Arlington, Va.

Randel, who said the alliance is now completing a survey of the industry, told Transport Topics that a majority of respondents so far feel the sector is the strongest it has been in five years. One reason could be growth in urban areas, along with economic gains throughout the world.

“As incomes rise in a lot of these emerging economies, there is increased demand for refrigerated items,” Randel said. “Cold [supply] chain becomes more and more important.”

Lineage said the Emergent acquisition will strengthen its port presence in the United States. With the deal, Lineage will get a newly constructed distribution center in the Dallas-Fort Worth market and four U.S. port facilities in New Orleans, Houston and Charleston, S.C.

The acquisition also provides it access into the $5 billion Australian cold storage market and will take the country into New Zealand, Vietnam and Sri Lanka.

Lineage Logistics CEO Greg Lehmkuhl

Lehmkuhl

“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,” Lineage CEO Greg Lehmkuhl said in a statement. “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.”

Lineage was founded in 2008 and is owned by Bay Grove of San Francisco. It reported $1.84 billion in revenue in 2018.

Lineage Logistics ranks No. 9 on the Transport Topics Top 50 list of largest logistics companies in North America.

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