Flexible packaging stalwart O F Packaging and resource recovery business Close the Loop have put forward a proposal to merge and list on the ASX under the name Close the Loop Group, with an expected market capitalisation of $65.9 million.
Speaking to ProPack.pro, O F Packaging managing director Joe Foster, who is earmarked as CEO for Close the Loop Group, says that both companies would remain functionally the same post listing, but be able to leverage against each others’ strengths.
“We really want to keep both companies running individually. They’re both unique in the marketplace, offering a different proposition. O F packaging on a packaging side, but with sustainability as a focus, and Close the Loop specialising in take back programs,” he said.
“What’s good about Close the Loop is that they have the infrastructure to collect from 60,000 sites in Australia, and 200,000 sites in America.”
The management team would also include Marc Lichtenstein as CFO, Lawrence Jaffe as CCO, and Darren Brits as COO.
The chairman of the company would be Greg Toll, with Grant Carman an independent non-executive director, Marc Lichtenstein as executive director and group company secretary, in addition to Darren Britts, Joe Foster, and Lawrence Jaffe taking on executive director positions.
The group would be able to offer a full circular economy solution to customers, taking back materials at end of life from brand owners and Original Equipment Manufacturers (OEMs), reforming them into new products, and selling them back.
That would go beyond flexible packaging, with Foster aiming to tackle some of the most problematic products to recycle, diverting them from landfill.
“When it comes to recycling difficult products – like power tools, cosmetics, e-waste, we want to take those products and turn them into a tangible product we can sell back to the original supplier of those products. That’s part of the plan and dream,” says Foster.
Of course, the packaging space has the biggest incentive to move quickly towards recycled materials and products, with the 2025 national packaging targets looming closer every day.
“Close the Loop Group will be well placed to leverage packaging and recycling regulatory targets sought to be achieved by 2025, which help us to create an environmentally favourable circular economy,” Foster said.
The merged entity would be able to offer O F Packaging customers an option to offer collection programs to the customers they sell to, helping them meet their environmental and waste management goals through the expertise of Close the Loop.
“Both companies in the market would be able to offer a full, circular experience,” Foster added.
The prospectus for the listing predicts revenue for FY22 to reach $73.9 million, with EBITDA of $12.3 million.
The new company will hit the ground running, with Close the Loop Group set to acquire seafood packaging business Oceanic Agencies shortly after listing. That would lift the expected revenue figure.
Close the Loop Group would then turn its attention to chemical recycling companies. Foster said the company expects chemical recycling to play a large role in the recovery of soft plastics and flexible packaging, which are typically hard to process through mechanical means.