Latest News

Plastic packager Pact takes Jalco for $80m

Wednesday, 24 June 2015
By Print21

'Ideal strategic fit': Brian Cridland, CEO Pact

Australia’s largest plastic packaging manufacturer Pact has signed an $80m deal to take over leading supplier Jalco Group, a manufacturer for prominent brands including Colgate, Ajax and Sunsilk.

“Jalco is an ideal strategic fit and will allow us to deepen existing customer relationships and enter new areas of growth,” said Brian Cridland, CEO of Pact Group. “We are extremely excited about the Jalco acquisition, an adjacent and highly complimentary business to the Pact Group enterprise. We have been a supplier to Jalco for many years, we understand the business and I am delighted to see these two companies come together.”

Pact has just secured a debt financing deal that will diversify its funding base and give the company access to further capital to fund potential growth opportunities.

“It’s in our DNA,” said Darren Brown, Pact CFO. “We have made 45 acquisitions over the past 13 years and have been very active, especially in the Australian and New Zealand markets.  I don’t see any reason why that would change in the future.  The debt refinancing deal extends our current facilities and will provide continuing support to extend our expansion plans.”

In an ASX announcement on Tuesday, Pact Group said it had extended and amended its bank debt facilities, which comprise a A$590m facility and a NZ$180m facility. Pact Group has also entered into a new $100m receivables purchase facility.

Melbourne-based Pact was established in 2002 and has a major presence in Australia, New Zealand and numerous Asian markets, manufacturing plastic packaging products for clients including Woolworths, Coles, Schweppes, Unilever and other major multinationals.

Sydney-based Jalco, established in 1973, makes products ranging from plastic bottles to washing powders, shampoo, automotive fluids and diet supplements for leading brands including Unilever, Sunsilk, Avon and Colgate. The company employs 500 staff across six sites in NSW and comprises a number of divisions, including homecare and personal care.   Jalco’s annual sales are estimated at $165m.

Pact will acquire Jalco for approximately $80m, which includes a conditional deferred component.  Acquisition costs were likely to total around $1m this financial year and would be funded through Pact’s debt facilities. The takeover is expected to be completed by 1 September, 2015, subject to a restructure of Jalco to retain its health and wellness division.

Analysts are tipping that Pact will continue with an expansion strategy over the next three years.

Comment on this article


To receive notification of comments made to this article, you can also provide your email address below.