* Private equity firm Triton/ADIA buy container firm
* Brambles sees $2.36 bln proceeds, plans $1.65 bln buyback
* Deal values IFCO at 9.5 times core earnings
* Brambles shares hit two-year high (Adds valuation, background)
By Tom Westbrook and Arno Schuetze
Feb 25 (Reuters) - Australian logistics group Brambles Ltd BXB.AX is selling its plastic containers business to private equity firm Triton and Abu Dhabi's wealth fund in a $2.51 billion deal, earmarking proceeds for a buyback and sending its stock higher.
Brambles said on Monday it planned to return up to $1.95 billion to shareholders from the $2.36 billion it expects in proceeds from the sale. Its shares jumped as much as 8.1 percent, before settling 2.8 percent higher at a two-year high, while the broader market .AXJO rose 0.3 percent.
Triton and the Abu Dhabi Investment Authority (ADIA) beat rival suitors EQT, Pamplona, PAI and Brookfield in Germany's second largest 2019 private equity buyout, as flagged by Reuters earlier this month. expects to complete the deal, which values the IFCO business at $2.51 billion including debt, or 9.5 its earnings before interest, tax, depreciation and amortisation, in the second quarter of 2019.
Brambles itself trades at 9.9 times its expected core earnings, while IFCO rivals such as Mobile Mini MINI.O and WillScot WSC.O trade at 10.6 and 12.9 times, according to Refinitiv data.
The acquisition of IFCO, which provides reusable boxes for transporting fruit, vegetables, meat and bread, is backed with debt worth 5.75 times IFCO's core earnings.
Brambles said its buyback would run up to $1.65 billion while $300 million of the proceeds will be returned to shareholders in cash, and the remainder would be used to repay debt.
According to people close to the matter, Triton is expected to make IFCO more international as its European business to date still accounts for more than 70 percent of revenues.
Brambles had said in August it planned to demerge IFCO, which generated revenue of $1.10 billion in the 2018 financial year and an underlying profit of $133 million. in 2010 purchased then Germany-listed IFCO, maker of reusable plastic containers for transporting fresh produce, for about $1.3 billion.
Brambles reaffirmed its current progressive dividend policy for its full year dividend in 2019.
Goldman Sachs (NYSE:GS) GS.N and UBS UBSG.S advised Brambles on the deal, while Bank of America (NYSE:BAC) BAC.N advised Triton and ADIA.