The parent company of pallet distributor CHEP said it planned to buy IFCO Systems NV, a Netherlands-based provider of reusable plastic containers for $1.26 billion.

IFCO provides plastic containers in 23 countries, as well as pallet management services in the U.S., CHEP’s parent, Sydney, Australia-based Brambles Ltd., said in a statement today announcing the planned purchase.

According to today's statement, Brambles agreed to buy about 96% of IFCO shares for the equivalent of about $18.34 each. The shares trade on the Frankfurt Stock exchange. That would be followed by a "minority buy-out process" where Brambles would eventually acquire remaining shares, the statement said.

The purchase “will enhance Brambles’ position as a global leader in pooling solutions,” creating a company with about $5 billion in annual sales, according to the company’s statement. Brambles’ purchase, which still must pass regulators’ reviews, is expected to be completed within nine months, the company said.

“The purchase of IFCO represents a unique opportunity for Brambles to enhance its position as the world’s leading pooling solutions provider and acquire operations with a strong growth profile,” Brambles’ chief executive officer Tom Gorman said in the statement.

IFCO “is a natural fit” with Brambles’ existing businesses, and “will allow us to continue to deliver on our strategy of diversifying our revenue base by product platform, geography and customer type,” Gorman said.

Gina Lester, a spokeswoman in Houston for IFCO’s North American operations, declined to comment.

In the U.S., there are about 1.2 billion wood pallets in use and the businesses that make, sell and repair the pallets generate about $5 billion revenue a year, according to the Pallet & Container Association.

CHEP parent to purchase IFCO for $1.26 billion