MELBOURNE, AUSTRALIA: Close the Loop Limited (ASX: CLG) has strengthened its position in the bulk packaging market via the acquisition of leading Australian bulk packaging business, Crasti & Company Pty Ltd.
Established for over 25 years, Crasti & Co. is one of Australia’s largest Flexible Intermediate Bulk Container (FIBC) and bulk packaging supplier. Crasti & Co. is a market leader in ensuring that all its FIBCs meet stringent Australian safety standards and has led the industry in developing these strict standards over many years.
Crasti & Co. is a founding member of the Australian Flexible Intermediate Bulk Container Association (AFIBCA).
The acquisition marks Close the Loop’s expansion into the bulk packaging market and provides a complementary market and product fit to Close the Loop’s existing O.F. Packaging business.
The deal delivers on the company’s strategy of growing within the niche packaging space and via acquisition. It follows the acquisition in December of commercial and bulk seafood packaging provider, Oceanic Agencies. Crasti & Co is one of Australia’s largest FIBC specialists.
Given Crasti & Co’s strong sales and net profit levels, it will have a significant impact on CTL’s sales and profitability levels and is anticipated to add approximately $2.78 million in gross profit on a proforma statutory FY22 basis. The acquisition is immediately earnings per share (EPS) accretive on a pre and post-synergy proforma statutory FY22 basis.
The purchase price is $5.85 million of which $4.387 million is payable at completion in cash plus any stock over the value of $1.0 million payable at competition in cash. The earn out payment is equal to Crasti & Company’s net profit before tax 12 months post completion x 3.1622 less $4.387 million cash paid at completion.
Group Chief Executive Officer Joe Foster said: “We are thrilled to be entering additional markets for Close the Loop via this acquisition of Crasti & Company. Entering into the bulk packaging market was a logical next step for Close the Loop as it provides us with a highly complementary market space and product suite to our existing packaging offering.
“Crasti & Company not only gives us ownership of a leading Australian FIBC provider, but also provides strong sales growth and profitability 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 Crasti & Co’s expertise in FIBCs 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 instead, gets recycled back into new products.”
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