Plastic packaging specialist Pact Group is acquiring Jalco Group, a supplier of outsourced manufacturing and filling in the non-food fast moving consumer goods (FMCG) sector.
Jalco operates across six sites in NSW and comprises a number of divisions, the largest two being Homecare and Personal Care.
Trailing annual sales for Jalco are approximately $165m. The business has a workforce of around 500 people.
Pact Group will acquire Jalco for a total price of around $80m, which equates to an EBITDA multiple of approximately 6.5x.
The consideration includes a conditional deferred component and acquisition costs, of which, approximately $1m will be expensed during the 2015 financial year.
The acquisition will be funded through Pact Group debt facilities.
Pact expects the acquisition of Jalco to be immediately EPS accretive and to generate an ROI in excess of 20% within 3 years.
Pact Group CEO, Brian Cridland, said “We are extremely excited about the Jalco acquisition, an adjacent and highly complementary 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 businesses come together.
“Jalco is an ideal strategic fit as it will allow us to deepen our existing FMCG customer relationships and to enter new areas of growth serving customers in outsourced contract manufacturing and packaging
“Pact has continued to lead the packaging sector in investment and innovation over the last decade and we are committed to a program of sustained investment in the Jalco business to better serve our customers and enhance their competitive capabilities.”