UFP Industries (UFPI) Buys NORPAL & TIBASA, Expands in Mexico
UFP Industries, Inc. UFPI continues its strategic expansion in the global packaging arena with the acquisition of the remaining ownership interests in NORPAL S. de R.L. de C.V. and TIBASA Universal Forest Products S. de R.L. de C.V., two key affiliates in Mexico. The entities will now amalgamate as UFP Palets y Embalajes S. de R.L. de C.V., operating across three key locations: Monterrey, Durango, and Guanajuato.
Shares of this wood product company have gained more than 3% during the trading session on Dec 1.
While the facilities presently focus on wooden pallet production, they are diversifying into other structural packaging segments. Rees Watson, a seasoned UFP Packaging executive, will spearhead the venture with the support of TIBASA founder Hector Labrada, who assumes the role of the new national sales director.
This move reinforces UFPI’s commitment to providing top-notch packaging solutions to its multinational clientele with operations in Mexico. The acquisition aligns with UFPI’s broader strategy to enhance its stature as a world-class packaging solutions provider.
Notably, UFP’s existing Mexican affiliate, Pinelli Universal, catering to the U.S. retail building materials market, remains unaffected by this transaction. UFPI’s strategic focus on expanding its footprint in the packaging sector signals a promising trajectory for the company, solidifying its reputation as a leader in the global packaging solutions market.
Acquisitions: A Major Growth Driver
Acquisitions have been UFP Industries’ preferred mode of solidifying its product portfolio and leveraging new business opportunities. UFPI acquired one company in the third quarter of 2023, four companies in 2022 and nine in 2021. On Sep 20, 2023, the company acquired 80 percent of the equity in Palets Suller, a leading manufacturer of machine-built pallets in Spain, which will up its game as the global packaging solutions provider.
Acquisitions contributed 2% to unit sales growth in third-quarter 2023. The company aims to focus on strategic buyout investments and maintain a healthy pipeline of acquisition targets in its core businesses to ensure long-term growth and margin improvement, expand product portfolio and global reach, accompanied by creating incremental value for customers and shareholders.
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UFP Industries stock jumped 42.5% year to date (YTD), handily outperforming the Zacks Building Products – Wood industry’s rise of 12.2%.
The latest strategic move expands this Zacks Rank #3 (Hold) company beyond pallets to diverse structural packaging solutions. UFPI’s enhanced capabilities position it as a premier global packaging solutions provider, meeting the demands of multinational clients in Mexico.
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Original: Investing Feed: UFP Industries (UFPI) Buys NORPAL & TIBASA, Expands in Mexico