Close the Loop Limited (ASX: CLG), an end-to-end solutions provider from design and manufacturing, through to collection and recycling of products, has strengthened its position in the bulk packaging market via the acquisition of Australian bulk packaging business, Crasti & Co.
Close the Loop said the acquisition, worth $5.8 million, marks its expansion into the bulk packaging market and provides a complementary market and product fit to Close the Loop’s existing O.F. Packaging business.
It added that the deal delivers on the company’s strategy of growing within the niche packaging space and via acquisition.
It also follows the acquisition of commercial and bulk seafood packaging provider, Oceanic Agencies, in December last year.
Close the Loop Group CEO Joe Foster said as Crasti & Co is one of Australia’s largest Flexible Intermediate Bulk Container (FIBC) specialists and given its strong sales and net profit levels, it will have a significant impact on Close the Loop’s sales and profitability levels.
He anticipates that this will add approximately $2.78 million in gross profit on a proforma statutory FY22 basis.
“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,” Foster said.
“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.”
Established for over 25 years, Crasti& Co. ensures that all its FIBCs meet stringent Australian safety standards and has led the industry in developing these strict standards over many years.
These FIBCs enable clients within major industries, such as food manufacturing, construction, and primary industries to transport their goods and ingredients safely, with a reduced likelihood of goods being damaged or contaminated during transit. The FIBCs have a capacity and load limit of up to three tonnes.
The company is a direct importer, national wholesaler and distributor and supplier to a large number of business-to-business clients, including multinationals, national corporates, and major government departments.
Its Australia wide client base is spread across a diverse industry base with no one client representing more than 6.3 per cent of total annual sales.