- Lineage Logistics signed definitive agreements to acquire its competitor Emergent Cold, according to a company press release. Transaction details have yet to be disclosed, but The Wall Street Journal reported Lineage could be paying more than $900 million for Emergent. Lineage expects the deal to close in 2020, according to the press release.
- From the deal, Lineage gains a new distribution center in the Dallas-Fort Worth region and four port facilities in New Orleans, Houston and Charleston, South Carolina. It also gains temperature-controlled logistics facilities in Australia, New Zealand, and Sri Lanka. Once the deal is finalized, the firm will have "1.7 billion cubic feet of temperature-controlled capacity across 260 facilities in 10 countries," according to the release.
- Expanding its international footprint will make Lineage "better able to help customers respond to constantly shifting market dynamics, such as global network optimization, tariff impacts, [and] consumer preference shifts," Greg Lehmkuhl, Lineage president and CEO, said in the release.
The Emergent Cold deal is the seventh acquisition Lineage has announced in 2019. In February, it bought its competitor, Preferred Freezer Services in a deal valued at over $1 billion. Once finalized it made Lineage the world's largest cold-chain logistics operator, according to the International Association of Refrigerated Warehouses.
Growth via acquisition is part of Lineage's expansion strategy along with new construction initiatives and organic growth, according to multiple press releases.
The growth of fresh grocery delivery and meal kit services has driven up demand for cold storage facilities and logistics services, generating demand for an additional 100 million square feet of real estate over the next five years, according to CBRE. Lineage focuses on foodservice specifically and currently counts Amazon, General Mills, McDonald's, Tyson Foods and Walmart among its customers.
In addition to buying up valuable cold-chain assets, Lineage is also focused on using new technologies, including Internet of Things, automation, and lidar to make its warehouses more space and energy-efficient. In July, it patented an algorithm that uses data from scans of its facilities to determine the best way to stack and organize pallets, opening up an extra 800,000 square feet of space to store product and saving $40 million in costs, according to a Fast Company report.
Correction: A previous version of this article misstated the number of acquisitions Lineage Logistics announced in 2019.