Cold storage firm Americold to acquire Cloverleaf for $1.24 billion

Americold Realty Trust (NYSE:COLD), a real estate investment trust specializing in developing and operating temperature-controlled warehouses, said it has acquired privately held Cloverleaf Cold Storage from its management and a private equity investor group for $1.24 billion.

The acquisition, expected to close by the end of June, will add Sioux City, Iowa-based Cloverleaf’s 22 facilities with 132 million refrigerated cubic feet in the central and southeast U.S., to Americold’s holdings, which will total more than 1 billion cubic feet under management. Americold, the second-largest U.S. cold storage provider based on refrigerated cubic feet, has developed, owns and operates 155 warehouses with 918.7 million refrigerated cubic feet in North America, Australia, New Zealand and Argentina. Cloverleaf is the fifth-largest cold storage provider in the United States.

The deal also broadens Americold’s position in what it termed the “protein business” segment, meaning the supply chains for fish, poultry, beef and the like. Chicken, in particular, has soared in popularity in recent years as western societies concerned about cost and health issues consume lower amounts of beef products in favor of less-expensive poultry. As of January 2019, a pound of poultry sold in the U.S. costs $1.92, an inflation-adjusted fall of $1.71 since 1960, according to data from The Economist. In inflation-adjusted prices, beef has fallen by $1.17 a pound to $5.80 over the same period, The Economist said.

Americold does not disclose the commodity mix of its 360 customers, citing confidentiality issues.

According to investment firm Stephens Inc., the U.S. meat market was valued at $182 billion as of December 2018. U.S. demand for meat is expected to grow by 2.3 percent, compounded annually, between 2017 and 2022, according to the report.