Cold Storage Market Update

October 4, 2021 5 Minute Read

By Dominic Burke Charles McCloy MRICS


The Operator Market

The consolidation of cold storage operators has remained the dominant theme in Europe. This is a continuation of activity in a market that has previously been highly fragmented, as businesses have typically been family run and limited to a single country or certain product. This has allowed operators to expand their platforms across different countries and have greater connectivity with customers across their network.

This is demonstrated by continued activity by key players in the market, the initial landmark deal being Americold’s acquisition of AGRO Merchants in Q4 2020 for $1.74 bn. AGRO Merchants, a platform owned by Oaktree that had significant exposure in Europe (23 facilities in 7 countries) and was the fourth largest operator globally. This deal was significant as it created a European platform for Americold, the world’s second largest operator, who previously had no coverage on the continent. Since then, Americold has continued to expand in Europe through the purchase of Bowman Stores in the UK for $74m, who operated from a single facility in Spalding, Lincolnshire.

Likewise, the world’s largest cold storage operator Lineage Logistics continues to expand. Lineage has made a number of strategic acquisitions in Denmark, Norway, Spain and Poland. However, Lineage’s largest deal has been the acquisition of Kloosterboer in Q2 2021. Previously Europe’s second largest operator, Kloosterboer operates 14 facilities worldwide. The business has modern facilities with a significant portside presence and a number of value-add services. This is important as it strengthens Lineage’s global supply chain offering and further ties with their acquisition of UTI Forwarding, a freight forwarder based in the Netherlands. This deal attracted significant interest from a number of financial and strategic bidders who were attracted by the strong performing business and development pipeline.

Other deals that demonstrate high levels of activity in Europe include Constellation’s purchases of HSH (UK), Frigologix (Belgium + France) and Goteborgs Fryshus (Sweden), as well as NewCold’s entry into Italy through the purchase of Pacaro. We also note Nichirei’s acquisition of Norish in September 2021 of 6 facilities in the UK for a reported price of £65.7m to grow their European portfolio, further demonstrating continued consolidation activity.

As well as acquisition, operators are expanding organically through either undertaking extensions at their facilities or developing new build to suite facilities to service growing demand. This is exemplified by NewCold having opened a new facility in Rennes in April 2021, as well as building new automated facilities in Piacenza (Italy) and Corby (UK). We view this to be a theme across a number of operators and there are a number of development projects due to come to market in the near future.

This activity has impacted on pricing as EBITDA transaction multiples are increasing as a result of robust sector demand. This is driven by strong investor interest looking to enter the sector through the acquisition of a platform, as private equity and infrastructure groups are increasingly recognising the important role that the sector plays in the food supply chain.

We expect there to be further activity in the sector, as operators seek innovative solutions to meet customer demand. This is likely to be met with sustained investor interest to support operator growth.


Investors remain attracted to the sound fundamentals of the sector. This has been demonstrated by its resilience during the pandemic as operators ensured the continued flow of goods, underpinning the role of cold storage in supporting the global trade of food in the supply chain.

Consolidation is predicted to continue as operators expand and strengthen their services to customers across Europe, however, the market still remains fragmented when compared to the US. As operators grow it is likely they will seek to streamline operations to ensure the efficient future running of their facilities through the modernisation of existing stock. Indeed, many facilities in Europe are aging (c. 25-30 years in age) and have high running costs, often requiring large CAPEX investments. We expect there to be greater investment in technology such as automation as a result which allows for reduced energy and running costs, whilst ensuring a smoother operational process that maintains the integrity of the customer product.

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