Melbourne-based sustainability focused company Close The Loop is looking to expand in the US market through the acquisition of refurbished electronics business ISP Tek Services in Texas.
The deal is said to be worth US$66 million, or A$99.7 million at the current exchange rate.
ISP Tek Services is described as a Tier 1 full consumer electronics life-cycle management business providing US-based remanufacturing capabilities for OEMs.
The acquisition allows ASX-listed Close the Loop to leverage significant consumer and commercial electronics remanufacturing and technological capabilities.
It adds a US market sales and trading presence and extensive distribution networks.
The company said it will also add reuse capabilities to the company’s portfolio and extend its service offering to OEMs, supporting sustainability and circular economy initiatives.
In addition to refurbishing and distribution of consumer electronics with a blue-chip customer base, ISP Tek also operated as an HP Remarketing Partner and authorised distributor.
Its core business is to operate as a third-party refurbisher for Microsoft, Samsung, LG and other manufacturers.
Once repurposed ISP Tek resells equipment to the education, healthcare and private sectors.
ISP Tek Services reported revenue for the 12 months to October 2022 of US$49m with net profit after tax of US$13.7m.
Close the Loop has issued an A$45 million capital raising and secured a debt facility of up to US$52.5 million.
Chief executive Joe Foster of Close the Loop said the acquisition delivers the company’s strategy of focusing on resource recovery, targeting North America.
“This acquisition is expected to deliver approximately 100 per cent earnings per share accretion to the Group on a historical annualised basis," Foster said.
Additionally, Close the Loop said it has acquired the remaining 20 per cent interest of its Belgian based operations ClozDloop through a share swap.
Close the Loop has partnered with Pricoa Private Capital, the private capital arm of PGIM, to establish a US$40.0 million senior secured term loan, a US$7.5 million revolving credit facility and a US$5.0 million delayed draw term loan facility to support the future growth and acquisitions.
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