Close the Loop (ASX:CLG) has issued a statement on the ASX today, updating its shareholders that the proposed sale of the company to private equity firm Adamantem has been terminated, leaving the company operating as a standalone entity and open to offers from other interested buyers.
The sale to Adamantem ceased as the binding transaction documentation between both companies was not executed and the indicative proposal involved “considerable complexity”, resulting in both parties unable to reach alignment on the commercial terms.
Founded in 2016, Adamantem manages assets in Australia and New Zealand across both private equity and, through Melior Investment Management, public market strategies. It already has a foot in the packaging space, having invested in Australian national distributor of sustainable packaging and serviceware products, Pac Trading, in July 2023.
Close the Loop announced to the ASX on 19 November 2024 that it entered into a transaction process deed, granting Adamantem an expedited period of exclusivity, allowing it to undertake due diligence and negotiate a binding Scheme Implementation Deed to acquire all of the shares in Close the Loop.
On 18 December 2024, Close the Loop extended the exclusivity period to 20 January to allow for finalisation of due diligence and negotiation, and signing of binding transaction documentation.
However, on 21 January, Close the Loop issued a statement saying the exclusivity period for the transaction has ended, even though Adamantem continued to progress its due diligence and discussions with Close the Loop.
At that time, Close the loop said, “There is no certainty that the parties will enter into binding documentation nor that a transaction of any kind will materialise”.
As Close the Loop anticipated, the deal has now fallen through, with the company saying it “remains confident of delivering on its strategic plan as a standalone entity, including capturing the significant global growth opportunity in IT refurbishment.
“Notwithstanding, the board is committed to maximising shareholder value and as such will continue to assess any future change of control transaction proposals if received.”
Board changes and new company focus
Wanting to more closely align board and management experience and expertise with its future industry focus of flexible packaging and IT refurbishment, the company also recently realigned its board.
Its chairman Greg Toll, CEO Greg Foster, and executive director and CFO Marc Lichtenstein have all stepped down from the board. Foster will remain at Close the Loop as the company’s chief operating officer.
The search for a new Group CEO is underway, with Close the Loop expecting the individual to be based in North America, and the new chairman to share the responsibilities of a market-facing role once appointed.
It has also appointed Telstra’s former executive director John Chambers as non-executive director, given extensive knowledge in technology.
Since listing on the ASX nearly three years ago, Close the Loop reported it grew revenue from $71 million to $219 million and NPATA from $6 million to $26 million in FY24 (ending June 2024).
During this period since listing, the number of its shareholders has grown from 825 to over 3,000.
