Lineage Logistics Announces Acquisition of Preferred Freezer Services

Novi, MI – February 25, 2019 – Lineage Logistics (“Lineage” or the “Company”), the world’s most innovative and trusted provider of temperature-controlled logistics solutions, today announced it has signed a definitive agreement to acquire Preferred Freezer Services (“Preferred”), a global network of state-of-the-art, temperature-controlled warehouses. This transaction marks a significant milestone for the temperature-controlled logistics industry. Customers will now be able to benefit from the complementary capabilities of two of the industry’s most innovative companies. Together the companies hope to set a new standard for global reach and technological advancements for their customers. Financial terms of the transaction were not disclosed.

“We are thrilled to welcome Preferred into the Lineage family of companies,” said Greg Lehmkuhl, President and Chief Executive Officer of Lineage. “Bringing their first-class management team, deep industry experience and network of strategically located facilities into our organization will enable us to provide best-in-class service offerings for customers worldwide. Lineage is now better positioned than ever to meet the needs – and exceed the expectations – of food customers on a truly global scale.”

Following the closing, the combined company will feature over 1.3 billion cubic feet of temperature-controlled capacity across over 200 facilities, with a global footprint that spans North America, Europe and Asia. At present, Lineage and Preferred have highly complementary real estate and customer bases, making their combination a strategic expansion into new markets and new service offerings.

“Joining Lineage will bring Preferred to the next level of customer service by broadening our global reach while also significantly expanding our innovation capabilities,” said John Galiher, Chief Executive Officer of Preferred. “I am tremendously proud of the company we have built and longstanding customer relationships we have fostered since founding Preferred Freezer Services in 1989. We have found the ideal partner in Lineage, and I look forward to working closely with Greg, as well as the Lineage and Bay Grove teams, to offer our expanded customer base the best services and capabilities in the industry.”

This transaction will increase Lineage’s ability to invest in next-generation technologies while making new advances using the companies’ combined intellectual property. Together, these enhanced innovation capabilities will enable Lineage to provide unparalleled operational and energy efficiency to its expanded customer base. After the combination, Lineage will have 17 automated facilities with over 800,000 automated pallet positions, including the two largest automated facilities in the world and an accelerating strategy to bring the most sophisticated automated solutions to meet ever growing customer demands and complexity.

“We have followed Preferred’s impressive growth and innovations under John’s leadership since launching Lineage and always knew that bringing these two companies together would reinforce our vision to be the most dynamic temperature-controlled company in the industry,” commented Kevin Marchetti, Co-Founder and Managing Partner of Bay Grove, the principal investment firm backing Lineage. “This transaction will equip Lineage with the global reach and innovation capabilities that will fuel the next chapter of the Company’s growth and we are excited to have them on board.”

“I’d like to thank John and the entire Preferred team for their incredible partnership,” said Peter Lamm, Managing Director of Fenway Partners, Preferred’s equity partner and owner. “Preferred has built a tremendous platform under the management team’s leadership and, on behalf of Fenway Partners, I am proud to have supported its sustained growth over the past decade. We wish both organizations great success as a combined company.”

As part of the transaction, significant new equity was committed by existing investors, Stonepeak Partners and D1 Capital Partners.

Lineage has grown rapidly through acquisitions and organic growth since its founding in 2008. The Company’s acquisition of Preferred builds on the success of its long history of successfully integrating complementary companies into its portfolio. The companies expect the transaction to close in the second quarter of 2019, subject to customary closing conditions and regulatory approvals.

Morgan Stanley & Co. LLC acted as financial advisor to Lineage in this transaction, and Latham & Watkins LLP served as legal advisor to Bay Grove and Lineage. UBS Investment Bank acted as financial advisor to Preferred, with Ropes & Gray LLP serving as legal advisor.