Plastic pallet pooler Intelligent Global Pooling Systems (iGPS), which filed for bankruptcy protection in June, today finalized its sale to iGPS Logistics LLC, a joint venture formed by the private equity firm Balmoral Funds, One Equity Partners, some of their affiliates, and Jeff and Robert Liebesman of the returnable packaging company Palogix International.
The sale was announced at about the same time that the company declared bankruptcy but had been subject to higher and better bids as well as bankruptcy court approval.
"We are extremely excited to have completed this transaction," said Jeff Liebesman, the new chief executive of iGPS Logistics, in a statement. "Our new capital structure, combined with the pooling experience brought by existing management team, Robert and myself, will enable us to enhance our current operations and expand our product offerings in the years ahead. We look forward to providing world-class service to our customers."
MISSING PALLETS CONTRIBUTED TO BANKRUPTCY
Orlando-based iGPS was launched in 2006 with Bob Moore, former head of pallet pooling giant CHEP, as its CEO. It billed itself as providing a plastic pallet that was 30 percent lighter than wood and could be tracked using RFID technology.
iGPS immediately began vying with CHEP for business, particularly in the grocery and beverage segments, and landed big names such as Kraft Foods, SC Johnson, WalMart Stores Inc., and Costco Wholesale Corp.
In 2011, however, chinks began to appear in the iGPS armor. iGPS' lenders reportedly declared the company in default of its loan covenants because it couldn't account for 15 percent of its 10 million pallets. According to published reports, lenders then began demanding payments from iGPS, which filed for bankruptcy protection earlier this year.
Additionally, ConAgra Foods Inc. and PepsiCo., two of its largest customers, returned to CHEP. It is unclear if the defections were due to any fallout from the missing pallets.
Plastic pallets are considered more durable than their wood counterparts. iGPS Logistics says the iGPS pallets can yield savings of up to $5 per pallet load to manufacturers, growers, and retailers because of lower transport costs, reduced risks of product damage, and other operational efficiencies.
Plastic pallets are, however, more expensive to manufacture and thus command a higher price tag. As a result, iGPS decided to embed RFID tags on its pallets to better track their location.
In a 2007 DC Velocity article, then CEO Moore explained, "Internally, for very selfish reasons, we can't afford to lose [our pallets]."