Pact Group signs major deal for Crate Pooling business
16 August 2023
- New strategic partnership to grow reusable plastic crates operations
- Pact to receive $160m in cash proceeds from transaction
Pact Group is selling 50% of its Crate Pooling business to global infrastructure investment manager Morrison & Co to expand its capabilities and accelerate growth opportunities.
The transaction will see the formation of a new joint venture with Morrison which will be 50% owned by Pact and operate as a separate entity.
Pact will receive approximately $160 million in cash proceeds from the sale net of costs and tax, and can receive a further earn out of $20 million, reflecting an enterprise value of $380 million for the business.
The Crate Pooling business, which is currently part of Pact’s Reuse division, manages an asset pool of reusable and recyclable plastic crates and folding produce bins used by retailers in Australia and New Zealand in their fresh produce supply chains.
The business manufactures the crates and bins in Australia and operates a network of wash and distribution facilities that keeps them circulating in a loop from suppliers to retailer distribution centres and into supermarkets.
The business recently extended its crate pooling contract with Woolworths by 10 years and plans to scale up usage from 50 million to 80 million crates a year by 2025. The business has also secured a long-term contract extension with ALDI Australia.
Pact CEO and Managing Director Sanjay Dayal said: “We’ve been seeing increased demand from customers for a rapid scale up of our Crate Pooling offering as they look to operate more efficiently and sustainably in the circular economy. This new strategic partnership with Morrison & Co is a great outcome for our customers as it will accelerate the growth of the business and offer an expanded range of products and service, with Pact sharing in the upside.”
Mark Mudie, Partner at Morrison, said: “This is an attractive opportunity for our clients to gain exposure to the circular economy thematic, which aims to eliminate waste by keeping products and materials in use for as long as possible. We believe the circular economy can tackle some of our greatest social and environmental challenges, while unlocking economic value for our investors.”
Cash proceeds from the sale will enable Pact to reduce debt and accelerate investment in the company’s plastic recycling and packaging business which is central to its circular economy strategy.
Completion of the transaction is expected later this year subject to the satisfaction of customary conditions and approvals.
– Ends –
Pact Group – Simon Dowding
0438 480 860 | email@example.com
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