Close the Loop Group is set to make a major US acquisition, spending US$66m on Texas-based refurbished electronics business ISP Tek Services.
The deal will enable Close the Loop to focus on resource recovery in the US, while for ISP it would provide a route to expand in overseas markets.
Funding for the deal includes a non-discounted US$40m capital raising, although the 33c shares based on today’s price did represent a 10.4 discount over the ten-day weighted price. The capital raising was immediately successful.
The acquisition price includes US$35m in cash, US$5m in earnouts, $11m to the ISP founders in the form of Close the Loop scrip, and the rest in convertible notes.
Close the Loop has been operating in the US for the past 16 years, just a year ago it expanded its packaging operations in the US market with the formation of Close the Loop Packaging, basing it in Kentucky at its existing headquarters, to service the customer network of the group’s US resource recovery business.
Ahead of an imminent announcement, CLG shares were placed in a trading halt on 15 March.
