Close the Loop acquires seafood packaging firm, Oceanic for $4.0mn

Close the Loop acquires seafood packaging firm, Oceanic Agencies for $4.0mn

MELBOURNE, AUSTRALIA: Close the Loop Limited (ASX: CLG) has acquired leading seafood bulk commercial packaging provider, Oceanic Agencies Pty Ltd.

Oceanic Agencies is a Queensland-based business and a major Australian supplier providing both packaging and materials handling for the aquaculture, wild caught and post-harvest sectors of the seafood industry.

Oceanic supplies some of the largest seafood companies in Australia with custom-printed commercial packaging, insulated bins, flexible plastic packaging and plastic tubs and crates. It is also the largest supplier of insulated bins in Australia and is the exclusive distributor for three globally recognised brands of insulated bins, and the only local distributor of three innovative sustainable packaging brands.

Oceanic currently supplies over 600 customers with a sustained interest in new business. It has experienced growth in both the number of clients and annual average contract volumes in the last three years.

In the year ended 30 June 2021, Oceanic generated audited revenue of $5.2 million and net profit of $764,000. On a normalised basis, Oceanic generated a net profit of $880,000 and earnings before interest and tax (EBIT) of $886,000.

Non-recurring vendor payments were made in the year ending 30 June 2021, which accounts for the difference between the audited and normalised profit.

All Oceanic’s products are manufactured in accordance with ISO standards, HACCP (Hazard Analysis Critical Control Point) protocols, and are food-grade certified.

The acquisition marks Close the Loop’s expansion in the growing commercial and bulk seafood packaging industry. It delivers on the Company’s strategy to grow within the niche packaging and recycling space. It complements Close the Loop’s range of flexible packaging that caters for some retail seafood brands.

The impact of Covid-19 has accelerated the seafood industry’s implementation of branded packaging and product recognition, resulting in a substantial increase in the supply of different styles of packaging.

The industry is also cognisant of sustainability initiatives and ensuring their supply chains meet stringent industry and ESG requirements. Therefore, there is a big drive towards sustainable packaging and the replacement of polystyrene cartons with recyclable options.

The acquisition is also expected to be earnings per share (EPS) accretive on a pre- and post-synergy proforma statutory FY22 basis.

Group Chief Executive Officer Joe Foster said: “We are delighted to have acquired Oceanic Agencies – a company at the forefront of new and innovative sustainable packaging and material handling products for the Australian seafood industry.

The acquisition delivers on our strategy of further growth within the niche packaging and recycling space and provides further diversification of our circular economy solution. We will combine Oceanic Agencies leading position in seafood packaging and growing customer base with our leadership in the global circular economy for packaging to further enhance our packaging and recycling offering across Australia and worldwide.”

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