Australia-based packaging and recycling company Pact Group has announced completing the sale of a 50% stake in its Crate Pooling business to Morrison & Co.
Pact will receive A$160m ($106m) in cash proceeds from the sale net of costs and tax with an additional earn-out potential of A$20m, translating to an enterprise value of A$380m for the business.
The latest announcement comes a few months after Pact signed the initial deal to sell 50% of its Crate Pooling business segment to Morrison & Co.
The companies have now set up a new joint venture (JV), with the Crate Pooling business rebranded as Viscount Reuse.
Viscount will operate as an independent entity and will primarily focus on expediting the growth of the businesses in the Australian and New Zealand markets.
At present, according to Pact, Viscount owns and manages an asset pool of reusable and recyclable plastic packaging crates.
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The new entity is also under contract with several grocery groups such as Aldi Australia, Woolworths, and New Zealand’s Foodstuffs.
Apart from supplying crates, the JV manufactures and provides bins for fresh food and automated supply chain uses.
Former Pact Reuse executive general manager and pending Viscount CEO Wayne Williams said: “We are excited about the future for Viscount Reuse and the growth that this new JV partnership will bring to existing and future customers who are committed to operating fresh produce supply chains more efficiently and sustainably.”
The companies have also opened a new service facility in Auckland, New Zealand, to further expand the new business and bolster its wash and distribution facilities network in the region.
This facility will help in keeping the crates moving in a closed-loop system between suppliers, retailer distribution centres, and supermarkets, to further minimise waste.
Designed to be used approximately 140 times, these crates serve as a sustainable alternative to single-use cardboard and polystyrene boxes.
Morrison partner Mark Mudie said: “Our investment in Viscount Reuse provides an opportunity for our investors to gain access to an experienced circular economy operator that enables customers to achieve their sustainability targets while improving product quality.”