Circular economy company Close the Loop sold its US-based ISP Tek Services business for US$10 million, as part of a broader strategic reset aimed at strengthening its balance sheet and sharpening focus on its core packaging and resource recovery operations.
In an ASX statement released on 20 May, the company said the transaction would allow it to streamline operations around its strongest-performing divisions, while using the proceeds and existing cash reserves to repay approximately US$16 million in debt.
The ISP business, based in Dallas, Texas, has been sold to Ivy Technology Holdings. The deal includes US$9 million payable at settlement, with a further US$1 million to be paid through quarterly instalments under a seller note arrangement.
Close the Loop chairman Grant Carman said the divestment marked an important milestone in the company’s transformation program.
“The sale of the ISP business marks an important milestone in the Company’s ongoing transformation and clearly demonstrates the meaningful progress achieved in strengthening and repositioning the business,” Carman said.
The company said the restructure would enable greater focus on its Packaging and Resource Recovery divisions, where it believes it has established strong operational capability and competitive advantage.
Alongside the sale, Close the Loop is also progressing refinancing discussions on its remaining US$19.5 million debt facilities, with the company expecting to reduce interest rates by approximately 350 to 400 basis points.
The ASX statement also outlined agreements reached with holders of two convertible notes totalling US$15 million. Under the arrangements, part of the debt will convert into equity, while other portions will be repaid through a combination of cash and longer-term interest-free loan structures, subject to shareholder approval.
Looking ahead, Close the Loop issued FY27 EBITDA guidance of between $14 million and $16 million, citing strong performance in its packaging operations and growth in its resource recovery businesses following recent OEM contract wins.
The company also flagged plans to introduce AI-driven process improvements across the organisation to improve efficiency and profitability.
“The company will become AI-powered, shifting from manual execution to strategic, AI-augmented workflows,” Carman said.
Close the Loop said it believes the simplified business structure, lower debt levels and focus on core circular economy operations position the company strongly for future growth in sustainable packaging and resource recovery markets.
