SYDNEY, AUSTRALIA: Close the Loop Limited has entered into an agreement to acquire 100% of ISP Tek Services LLC and Captive Trade Corp., US-based electronics refurbisher and trading platform businesses based in Southlake, Texas, USA, for a total consideration of up to US$66 million (A$99.7m).
The acquisition will provide the Company with significant consumer and commercial electronics remanufacturing and technological capabilities, a considerable US market sales and trading presence, and extensive distribution networks.
It will also add reuse capabilities to the Company’s portfolio and further strengthen its service offering to original equipment manufacturers (OEMs), supporting sustainability and circular economy initiatives.
ISP Tek Services LLC. and Captive Trade Corp. are leading refurbishers and distributors of consumer electronics within a blue-chip customer base that has helped deliver phenomenal growth in its last two years of trading.
ISP Tek Services LLC is an HP Remarketing Partner and Authorized Distributor, as well as a third-party refurbisher (TPR) for Microsoft, Samsung, LG and other industry-leading manufacturers. It refurbishes high volumes of off-lease or previously-owned computers as well as inkjet, LaserJet and commercial printers.
Products are obtained from OEM’s return route channel and mass retailer returns, plus a variety of different sources including excess inventory, bulk purchases, customer returns, cancelled orders, damaged products, and demo products.
ISP Tek Services then refurbishes these products and re-sells to the education, healthcare and private sectors, as well as providing a marketplace for direct-to-consumer sales, utilising its signature highly automated processes to reduce reliance on skilled labour and maximizing accuracy.
ISP Tek Services and Captive Trade Corp recorded US$32m of revenue in CY21 with adjusted NPAT of US$8.7m, and revenue for the trailing 12 months to October 2022 of US$49m with NPAT of US$13.7m.
ISP Tek Services founders, Sammy and Dania Saloum, have over 30 years of industry experience in consumer electronics and the returns lifecycle management space, working with fortune 500 companies across the US.
Sammy Saloum is a leader in omni channel retail, merchandising, marketing, financial services and reverse logistics, and has developed a global network in all aspects of the industry.
He has a reputation for delivering strong revenues and profits, and positioning start-up and existing businesses for sustainable growth in the US and international markets.
Dania Saloum has extensive experience in designing and implementing go-to-market strategies for programs, products, and services. She has a proven track record of delivering accelerated business growth and achieving strategic and financial objectives.
Following the completion of the transaction, the Saloum’s will be substantial shareholders of Close the Loop. They will continue to manage the ISP Tek Services business and assist the existing Close the Loop management team with the global expansion of ISP Tek Services.
Close the Loop Group Chief Executive Officer Joe Foster said: “The acquisition of ISP Tek Services delivers on our strategy of focusing on resource recovery, particularly in the world’s largest capital market, North America. This acquisition is expected to deliver approximately 100% earnings per share accretion to the Group on a historical annualised basis. ISP Tek Services is a Tier 1 full consumer electronics life-cycle management business with a keen focus to provide US-based remanufacturing capabilities for market-leading OEMs, which provides the Group with significant opportunities to expand in further regions around the world. We do not, however, expect to make any further acquisitions in the near future due to our already strong global foothold on the circular economy.”
Sammy Saloum, founder and CEO of ISP, said: “We are excited about the opportunities that the combined Group can deliver in the remanufacturing space globally. With our complimentary service offerings, the Group can provide Tier 1 manufacturers with a responsible and secure end-to-end solution to manage their product lifecycles closer to home. Considering the chances of supply-chain instability and due to the sensitivity of data security of enterprise, corporate and consumer devices, bringing returns refurbishment closer to the original point of sale is a high priority for OEMs. The combined service offering allows the Tier 1 manufacturers to deliver on their circularity pledge and remanufacturing targets.”