UFP Industries (UFPI) Buys Palets Suller Stake, Expands in Spain
UFP Industries, Inc. UFPI is set to make significant strides in the European market with its latest acquisition. Its subsidiary, UFP Global Holdings Ltd., acquired an 80% stake in UFP Palets y Embalajes SL, formerly known as Palets Suller Group. The deal, valued at approximately $52 million, is poised to bolster UFPI's presence in the Spanish market.
Headquartered in Castellón, Spain, Palets Suller Group is the dominant player in machine-built wood pallets, catering primarily to Spain's thriving ceramic tile industry. With a remarkable $38 million in sales over the trailing 12 months that ended in August 2023, Palets Suller Group has solidified its position as a market leader in this sector.
Samuel Suller Oliver, the founder and CEO of Palets Suller Group, will continue to hold a 20% stake in the company, assuming the role of executive director, and will oversee day-to-day operations. Collaborating with him will be UFP veteran Alex Kladt, who will work alongside the Palets Suller leadership team to enhance the business and achieve operational synergies.
Acquisitions: A Major Growth Driver
Acquisitions have been UFP Industries' preferred mode of solidifying its product portfolio and leveraging new business opportunities. UFPI acquired four companies in 2022 and nine in 2021. Acquisitions contributed 2% to unit sales growth in second-quarter 2023. Also, it projects acquisitions to contribute half of its total annual unit sales growth.
The latest strategic acquisition allows UFP Industries to diversify its European portfolio while capitalizing on the thriving Spanish ceramic tile industry, one of the world's largest manufacturing export markets. Furthermore, it provides an excellent foundation for UFP Industries to expand its value-added packaging business throughout Europe.
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UFP Industries stock jumped 28.3% year to date, strongly outperforming the Zacks Building Products - Wood industry’s rise of 8.7%.
With its sights set on growth and innovation, UFP Industries is clearly positioning itself for success in the European market, solidifying its reputation as a global industry leader.
Zacks Rank & Key Picks
UFP Industries currently carries a Zacks Rank #3 (Hold).
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