MELBOURNE, AUSTRALIA: Close the Loop Limited (ASX: CLG) has strengthened its position in the recycling market via the acquisition of US recycling company In-Plas Recycling. The acquisition expands both companies’ service offering in recycled plastics processing.

Purchase price is $4.0 million (including up to US$500,000 of inventory) of which $3.0 million is payable at completion and $250,000 is payable per annum for four years.

Close the Loop Chief Executive Officer Joe Foster said: “We are pleased to be entering additional markets via the acquisition of In-Plas Recycling. The acquisition significantly expands our recycling scope and capabilities in North America as well as our presence on the plastics commodities market.

“In-Plas Recycling not only gives us ownership of a US-based recycler and processer but provides strong sales growth, profitability and delivers a diverse suite of well-established and loyal clients.

“The synergies between In-Plas Recycling and Close the Loop provide for considerable opportunities for growth. A senior member of our US management team has prior experience working with In-Plas, and both companies’ complementary services mean we are able to combine innovative solutions to turn waste polymer-based materials into valuable new products for more sectors.”

Established for over 20 years and headquartered in Cincinnati, Ohio, In-Plas Recycling is a recycler and processor of post-industrial scrap, pellets, regrind and by-products, and also sells a broad range of recovered plastic products on the market. In-Plas operates at three sites located at key customer facilities.

In-Plas works with a variety of thermoplastics and operates across multiple sectors including automotive, manufacturing and pharmaceutical. It provides bespoke solutions to maximise scrap value, create landfill costs savings and increase closed-loop recycling capabilities. In-Plas also provides verifiable destruction, rendering as unusable products such as automotive assemblies, retail and pharmaceutical packaging, CDs, obsolete signage and VCR tapes.

In-Plas’ US client base is spread across a diverse range of industries, with about 40% being contracted plastics processing customers and 60% being on the open market. It has experienced sales growth of 22% over the past year.

The acquisition delivers on Close the Loop’s strategy of growing within the recycling space in line with its core focus on the circular economy. Due to the complementary parts of the market that both companies operate, the acquisition increases the product suite that Close the Loop can sell into the plastics secondary market in North America.

Equally, Close the Loop expands the processing capability of certain In-Plas Recycling products, creating more markets for the current In-Plas product suite.

The acquisition is expected to be immediately earnings per share (EPS) accretive on a pre- and post-synergy proforma statutory FY23 basis, adding US$1.1 million to CTL’s EBITDA on an annualised basis.