Pact closes crate pooling sale, forms new JV

Pact Group and global infrastructure investment management company Morrison & Co have concluded a deal that will see the formation of a new joint venture aimed at scaling up Trans-Tasman reusable packaging crate operations.

Under the terms of the deal, Morrison & Co, acting on behalf of its investors, has acquired a 50 per cent stake in Pact's Crate Pooling business, leading to the establishment of Viscount Reuse as an independent entity. The joint venture is set to focus on expanding its capabilities and accelerating growth opportunities in the sustainable packaging sector across Australia and New Zealand.

As part of the deal, Pact will receive approximately A$160 million in cash proceeds from the sale, net of costs and tax, with an additional earn-out potential of A$20 million. This reflects an enterprise value of A$380 million for the Viscount Reuse business.

The Viscount Reuse business will be headed up by incoming CEO Wayne Williams, formerly the executive GM of the Pact Reuse business. Commenting on the deal, Williams said, "We are excited about the future for Viscount Reuse and the growth that this new joint venture partnership will bring to existing and future customers who are committed to operating their fresh produce supply chains more efficiently and sustainably."

Mark Mudie, partner at Morrison, emphasised the critical role of Viscount Reuse in fostering more sustainable grocery supply chains and reducing food and packaging waste. He said, "Our investment in Viscount Reuse provides an opportunity for our investors to gain access to an experienced circular economy operator that enables its customers to achieve their sustainability targets while improving product quality."

Viscount Reuse manages an extensive asset pool comprising reusable and recyclable plastic packaging crates, boasting contracts with major grocery groups such as Woolworths, ALDI Australia, and Foodstuffs in New Zealand. The company is also involved in the manufacturing and supply of crates, bins, and megabins essential for the fresh food and automated supply chain sectors.

Viscount Reuse opened a new service facility in Auckland, New Zealand earlier this month. This facility strengthens the existing network of wash and distribution facilities throughout both countries, facilitating the seamless movement of crates in a closed-loop asset pool. This operational model contributes to a reduction in waste and maximises efficiency by circulating crates between suppliers, retailer distribution centres, and supermarkets.

The reusable and recyclable nature of Viscount Reuse's crates positions them as a sustainable alternative to single-use cardboard and polystyrene boxes. Designed for approximately 140 uses before recycling, these crates offer economic and sustainability benefits, driving adoption across fresh grocery supply chains.