Refrigerated storage company Lineage Logistics of Novi, Mich., said it has agreed to purchase Preferred Freezer Services, a network of temperature-controlled cold storage warehouses based in Chatham, N.J.
Terms were not disclosed.
The acquisition will increase Lineage’s ability to invest in next-generation technologies while making new advances using the companies’ combined intellectual property, Lineage officials said.
Lineage will have 17 automated facilities with more than 800,000 automated pallet positions, including the two largest automated facilities in the world, the company said.
Preferred Freezer, which designs, constructs and maintains state-of-the-art warehouses throughout the United States and Asia, grew from a single facility in 1989 to 39 U.S. locations. It also has centers in China and Vietnam, the company said.
“We are thrilled to welcome Preferred into the Lineage family of companies,” Lineage CEO Greg Lehmkuhl said. “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.”
The sale indicates a healthy market for refrigerated transport and storage, according to the Global Cold Chain Alliance.
The combined company will result in more than 1.3 billion cubic feet of temperature-controlled capacity at more than 200 facilities. Its global footprint would include North America, Europe and Asia, Lineage officials said.
“Joining Lineage will bring Preferred to the next level of customer service by broadening our global reach while also significantly expanding our innovation capabilities,” Preferred CEO John Galiher said.
By snapping up Preferred Freezer, Lineage will lead the sector, followed by Americold Logistics of Atlanta, which reported 918.7 million cubic feet last year, according to the Global Cold Chain Alliance.
Lineage’s move comes as private equity and other investors do not see food businesses slowing down, and are not overly concerned with ongoing trade talks between the United States and China.
“We just have not seen a lot of (trade-related) impact on our clients,” said Megan Costello, chief operating officer of the Global Cold Chain Alliance, which represents 1,100 refrigerated-storage-and-transport companies in 80 nations. “Our industry is very stable. People have to eat. We didn’t see a big hit (during the Great Recession from 2007 to 2009).”
Lineage has expanded through acquisitions and organic growth since its founding in 2008, the company said. Lineage’s customers include major companies such as Perdue Foods and Walmart.
Kevin Marchetti, co-founder and managing partner of Bay Grove, the principal investment firm backing Lineage, said, “This transaction will equip Lineage with the global reach and innovation capabilities that will fuel the next chapter of the company’s growth.”
As part of the transaction, significant new equity was committed by existing investors Stonepeak Partners and D1 Capital Partners.
Lineage Logistics ranks No. 18 on the Transport Topics Top 50 list of largest logistics companies in North America.