Close the Loop Group is listing on the ASX today, following the completion of an over-subscribed $12 million capital raising, with strong support from institutional and cornerstone investors.
Close the Loop Group (ASX: CLG) says it will be the first provider of full circular economy solutions – from creation and design, manufacture, and then collection and reuse or recycling – to list on the ASX.
CLG is listing following the merger of two companies: Close the Loop, a resource collection and recycling company that creates revenue through sorting and processing, value added services and recycling materials; and O F Packaging, provider of innovative flexible and carton packaging, printing, and related sustainability solutions.
Combined, the two entities, which have 240 employees, provide end-to-end circular solutions for reducing waste to landfill, and getting recycled content back into new products through processing and recovery operations in Australia, North America, Europe, Vietnam, China, and South Africa.
The cash raised from the market listing, which saw shares begin trading at 20 cents apiece, will be pumped back into the business, which is now valued at $65.9 million. The company is anticipating sales of $74m in its first year, around 10 per cent higher than the combined total for last year, and an EBITDA of $12.3m.
The O F Packaging side of the business will generate around 57 per cent of sales through its soft packaging solutions for a range of products, while Close The Loop’s recycling “take-back” business will contribute around 43 per cent.
Joe Foster will be chief executive officer of the new business, he said: “Today Close the Loop becomes Australia’s most advanced vertically integrated design, manufacturing, collection and recycling company, that reduces waste to landfill and gets recycled content back into new products. Our award-winning packaging products and regenerative uses for plastics help companies stay ahead of evolving recycling guidelines and regulations.
“With only two per cent of plastic packaging globally currently being recycled, customers need more effective and efficient recovery and take back or re-use of valuable product resources to increase their sustainability footprint. Coupled with the strong regulatory changes stipulated by governments around the world, we are excited about Close the Loop’s prospects and our ability to benefit from these key long-term global trends.”
With 250 enterprise customers in 20 countries, CLG is well positioned within the circular economy to benefit from several tailwinds, such as the OECD’s 25 climate actions, 2025 emissions targets and increasing regulation on plastics and waste.
Foster said, “Today’s listing is the culmination of a journey that the directors began two years ago. It will enable the company to meet its growth targets. All the funds from the raising will be directed back into the business, which will become a leader in the circular economy with its end-to-end solutions.”
The company is already looking at developing the recycled printer cartridge toners it now uses in roads for flexible packaging, Foster said, “We are working on mechanical recycling, and especially chemical recycling.”
Foster paid tribute to Close The Loop founder Steve Morris, who remains in the business, saying, “His mission when he started CTL 20 years ago was zero waste to landfill, and he has fulfilled that promise.”