Brambles, the support services group, has withdrawn from the German waste disposal sector to concentrate on higher margin businesses.
The Australia-based group, the world’s largest supplier of pallets, sold its Cleanaway business in Germany to Sulo, which is owned by Blackstone Group and Apax Partners, the private equity groups, for £387m.
The price, which equals one year of sales and 10 times last year’s operating profit, was welcomed by analysts. The company said it would book a £50m pre-tax profit from the sale.
Brambles shares fell 7p 327p in a lower London
David Turner, Brambles chief executive, said: “Each part of Brambles must create growing value for shareholders in the long term. We have taken this opportunity to sell Cleanaway Germany at an attractive price.”
He added that he had no immediate plans to sell its UK or Australian waste businesses, which have also experienced difficulties.
Mr Turner said that a combined Ausdoc and Recall, the company’s information management unit, could take advantage of the higher growth area of IT.
Tony Shepard, analyst at Charles Stanley, said the disposal was a surprise but Brambles had received a good price. He said: “They have been having difficulties for the last two years in
Germany where it has been winning business but at lower margins.”
The sale marks the exit for Brambles from the German waste management sector where profits and margins have been falling. But David Turner, chief executive, said he had no immediate plans to sell its UK or Australian waste businesses which have also experienced difficulties.
Brambles was advised by UBS on the Ausdoc buy. CSFB advised Blackstone Group and Apax Partners on the Cleanaway purchase.
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