Australia-based investment company Kin Group has revealed its plans to make an unconditional all-cash off-market takeover bid for all of the ordinary shares of sustainable packaging business Pact Group.
The company will make the bid through its wholly owned subsidiary Bennamon Industries.
Kin currently has a controlling interest of more than 50% in Pact and will now offer A$0.68 ($0.48) cash per share for all ordinary shares in Pact, valuing the deal at A$234m.
The offer, being unconditional, is not subject to any restricting conditions.
In a statement, Kin said: “Kin Group has every confidence in Pact and its employees. However, Kin Group considers that success for Pact is best achieved under private ownership without the additional costs, market volatility and complexities of being an ASX [Australian Stock Exchange] listed company.”
The company plans to delist Pact from the ASX as soon as possible, subject to materialising the acquisition.
Operating since 2002, Pact is headquartered in Melbourne, Australia, and specialises in developing tailored packaging solutions using locally sourced recycled content.
It mainly operates in its home country, along with New Zealand, Asia, the US, and the UK, and services both the consumer and industrial sectors.
The company has been struggling as of late due to supply chain disruptions, inflationary pressures, fluctuating resin prices, labour constraints, and macroeconomic uncertainty within the country.
Macquarie Capital and Ashurst acted as the financial adviser and legal adviser to Kin during the process, respectively.
Last month, Pact signed an agreement to divest 50% of its Crate Pooling business to global infrastructure investment manager Morrison & Co.
The move is intended to expand its capabilities and accelerate growth opportunities.
Kin is supportive of this sale and noted that Pact’s core business size, operating scale, and available cashflow will reduce considerably after the divestment.