Close the Loop (ASX:CLG) has entered into an agreement to acquire US electronics refurbisher and trading platform ISP Tek Services for up to US$66 million ($99.7 million).
The company said the acquisition will provide it with significant consumer and commercial electronics manufacturing and technological capabilities, a considerable US market sales and trading presence and extensive distribution networks.
In addition, it will add reuse capabilities to the company’s portfolio and further strengthen its service offering to original equipment manufacturers, supporting sustainability and circular economy initiatives.
ISP Tek Services founders Sammy and Dania Saloum will be substantial shareholders of Close the Loop following the completion of the transaction and will continue to manage the ISP Tek Services business and assist the Close the Loop management tram with the global expansion of ISP Tek Services.
Close the Loop CEO Joe Foster said, “The acquisition of ISP Tek Services delivers on our strategy of focusing on resource recovery, particularly in the world’s largest capital market, North America. This acquisition is expected to deliver approximately 100 per cent earnings per share accretion to the group on a historical annualised basis.
“ISP Tek Services is a tier 1 full consumer electronics life-cycle management business with a keen focus to provide US-based remanufacturing capabilities for market-leading OEMs, which provides the group with significant opportunities to expand in further regions around the world.
“We do not, however, expect to make any further acquisitions in the near future due to our already strong global foothold on the circular economy.”
Sammy said the company is excited about the opportunities that the combined group can deliver in the remanufacturing space globally.
“With our complimentary service offerings, the group can provide tier 1 manufacturers with a responsible and secure end-to-end solution to manage their product lifecycles closer to home,” Sammy said.
“Considering the chances of supply chain instability and due to the sensitivity of data security of enterprise, corporate and consumer devices, bringing returns refurbishment closer to the original point of sale is a high priority for OEMs. The combined service offering allows the tier 1 manufacturers to deliver on their circularity pledge and remanufacturing targets.”