Close the Loop (CTL) has bolstered its US operations by acquiring Ohio-based plastics recycler In-Plas for $4m, with the acquisition further strengthening its position in the lucrative recycling market. The deal is expected to settle at the end of this month.
In-Plas is a well-established, profitable recycler and processor of post-industrial scrap, pellets, regrind and by-products. It has experienced sales growth of 22 per cent over the past year.
CTL says it operates in a complementary market, and says it is a product fit with CTL’s existing recycling offering. It says the deal will boost the market offering of both companies It also expands the service offering into recycled plastics processing and the automotive sector.
The acquisition is consistent with CTL’s strategy to grow within the recycling space, and is expected to be immediately earnings accretive, adding US$1.1m to CTL’s EBITDA on a trailing 12- month basis.
Close the Loop CEO Joe Foster said, “We are pleased to be entering additional markets via the acquisition of In-Plas Recycling. The acquisition significantly expands our recycling scope and capabilities in North America, as well as our presence on the plastics commodities market.
“In-Plas Recycling not only gives us ownership of a US-based recycler and processer but provides strong sales growth, profitability and delivers a diverse suite of well-established and loyal clients.”
Established for 20 years and headquartered in Cincinnati, Ohio, In-Plas Recycling is a recycler and processor of post-industrial scrap, pellets, regrind and by-products, and also sells a broad range of recovered plastic products on the market. It operates at three sites located at key customer facilities.
In-Plas works with a variety of thermoplastics, and operates across multiple sectors including automotive, manufacturing and pharmaceutical. It provides bespoke solutions in order it says to maximise scrap value, create landfill costs savings and increase closed-loop recycling capabilities. In-Plas also provides verifiable destruction, rendering as unusable products such as automotive assemblies, retail and pharmaceutical packaging, CDs, obsolete signage and VCR tapes.
The In-Plas US client base is spread across a diverse range of industries, with about 40 per cent being contracted plastics processing customers, and 60 per cent being on the open market.
Foster said, “The synergies between In-Plas Recycling and Close the Loop provide for considerable opportunities for growth. A senior member of our US management team has prior experience working with In-Plas, and both companies’ complementary services mean we are able to combine innovative solutions to turn waste polymer-based materials into valuable new products for more sectors.”
Due to the complementary parts of the market that both companies operate, the acquisition increases the product suite that Close the Loop can sell into the plastics secondary market in North America. Close the Loop also expands the processing capability of certain In-Plas Recycling products, creating more markets for the current In-Plas product suite.
The acquisition cost of US$4m includes up to US$500,000 of inventory. Some US$3m is payable at completion (expected 31 January) with US$250,000 payable per annum for four years. The acquisition will be funded from existing cash and bank debt.
