Brambles had tried to sell Recall earlier this year, but scrapped those plans due to a ‘challenging market environment’ and no attractive bids. Recall generated ~$807m in revenues and ~$144m of operating profit in FY ’13, a steep drop from the prior fiscal year. As one way to fuel future growth, the company plans to expand its geographic footprint from the 23 countries it currently has facilities in. The company was launched with ~$500m of net debt, the proceeds of which were mostly used to pay down a loan to the parent. Doug Pertz, who joined the company to head the Recall group earlier this year, was named CEO of the new company and Ian Blackburne was named Non-Executive Chairman.
The stated rationale in the demerger ‘scheme book’ (isn’t that great – a scheme!) was pretty standard spin language including increased focus, better capital allocation and tailored investor choice. The scheme book is loaded with information on the transaction and additional documents and information can be found on this dedicated demerger page. In general, analysts were positive on the plan as it allowed Brambles to focus on growing its pallet business where it serves some of the largest companies in the world. Since opening on the ASX, Recall has been a bit volatile, but mostly unchanged.
Disclosure: Author holds no position in any stock mentioned.
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