MELBOURNE, AUSTRALIA: Close the Loop Limited (ASX: CLG) announces acquisition of 100% of thermal paper supplier and sustainable paper products group, Alliance Paper Pty Ltd. for a total purchase price of $1 and an investment in working capital of approximately $4.5 million.

Alliance is a leading Australian supplier of thermal paper and associated paper products and services. It is the largest and longest-serving supplier and converter of paper roll products in the Australian market.

Alliance offers a range of BPA and phenol-free thermal receipt rolls and other paper products which are recyclable, supplying leading Australian supermarkets as well as several leading brands including KFC, McDonalds, Nike and Bank of Queensland.

Strategic Rationale

The acquisition furthers Close the Loop’s strong position in the sustainable paper product sector. It also allows the Company to develop new sustainable paper products that can replace some traditional plastic packaging, based on technologies that Alliance has developed and has been trialled successfully by our OF Flexo business.

Alliance has also developed sustainable paper products such as recyclable coffee cups, disposable and recyclable eskys.

The deal will enhance Close the Loop’s revenue and profitability levels in FY23, with Alliance expected to grow
revenues to $19.7 million in FY23 from $11.7 million in FY22 and EBITDA to $2.4 million in FY23 from a loss in
FY22. The revenue growth is being driven by new supply contracts and investment in inventory to meet the
increased demand for Alliance products.

Details of the Acquisition
• Assets purchased: 100% of Alliance Paper Pty Ltd.
• Purchase price: $1 payable at settlement on 31 August 2022.
• Working Capital: $4.5 million investment in working capital to be made at settlement date and beyond.
• Funding: cash and bank debt.
• Net Assets of $4.88 million at 30 June 2022.
• Management remains after the acquisition.

Group Chief Executive Officer Joe Foster said: “We are thrilled to acquire Alliance as it further strengthens our
position in the lucrative thermal paper and paper products sector and provides us with a highly complementary
market space and product suite to our existing packaging offering. It will allow us to replace some traditional
plastic packaging with a paper-based solution based on technologies that Alliance has developed and have been
trialled successfully by OF Flexo.”

“Alliance offers strong sales growth and profitability levels, significant cost synergies and a diverse suite of well-
established and loyal clients. The acquisition delivers on our strategy of growth via acquisition and further
expansion within the niche packaging sector.

“The combination of Alliance’s expertise in paper products and our leadership in the global circular economy for
packaging will increase our capability to reduce the amount of waste that ends up in landfill and is instead
recycled into new products.”

Managing Director of Alliance Paper Jon Williams added: “Alliance Paper has a proud 38-year history as a leader
in the domestic paper market. We have driven the adoption of chemical-free and safer consumer products in the
paper and packaging space and most recently, we pioneered the commercial strategy and adoption of BPA-free
thermal paper across the Australian market.

“For us, true circular integration requires a broad and complete approach and to be part of Close the Loop’s
industry-leading solution is an opportunity to deliver real change. The capacity to develop and deliver chemical-
free paper packaging solutions manufactured with the same organisation that can manage the waste stream for
the same post-consumer use items is a rewarding and exciting next step for our organisation.