Close the Loop has acquired The Pouch Shop, a niche provider of ready-to-label packaging and pouches for food products in South Africa.
The Pouch Shop is one of the largest stockist of off the shelf ready-made pouches in Southern Africa.
The company, which is majority owned by Close the Loop executive director Joe Foster, was due to be incorporated in the original IPO. However, due to COVID travel restrictions all due diligence on site was not able to be performed last year.
Close the Loop said the Pouch Shop product range of recyclable flat bottom and stand-up pouches caters to small-volume, fast-to-market customer needs.
It added that its range and customer base will complement the South Africa-based Foster International Packaging offer.
The two South African businesses currently share warehouse and manufacturing facilities as well as back-end office and logistics processes.
Details of the Acquisition include:
- Assets purchased: 100 per cent of The Pouch Shop CC acquired
- Purchase price: 2.66 times the sustainable earnings being R3,000,000. The purchase price will be R8,000,000 (A$701,000) plus stock on hand less an amount equal to what is owed to trade creditors
- Payment Terms: 50 per cent at settlement with the balance paid in 24 months
- Funding: The acquisition is funded from bank debt and free cash flows generated by the South African Division, Foster International Packaging.
Close the Loop has also revealed that it has settled the acquisition of leading chemical free thermal paper supplier and sustainable paper products group, Alliance Paper, strengthening its capability in the paper products and packaging sector.
Originally announced in late July, it allows Close the Loop 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 Close the Loop’s O F Flexo business.
Alliance has also developed sustainable paper products such as recyclable coffee cups, disposable and recyclable Eskys.
