Pact acquires speciality co-manufacturer APM for A$90 mn


Australia’s largest rigid packaging maker Pact Group Holdings is closely trailing compatriot Australian packaging manufacturer Amcor in its acquisitions. Pact is acquiring speciality co-manufacturer, Australian Pharmaceutical Manufacturers (APM), for A$90 million. The acquisition price represents a multiple of 6.5 times historical EBITDA. Completion is expected to occur on 16 September 2016, subject to customary conditions.

APM is one of the largest providers of manufacturing and packaging services for nutraceuticals in Australia. Established in 2002, APM has significant industry experience. It is strongly aligned with its customers and has established, long term relationships with leading participants in the health and wellness sector.

The acquisition of APM is a further step in the group’s strategy to expand in specialised co-manufacturing. It compliments and extends Pact’s existing position established through the acquisition of Jalco in September 2015.

Jalco was established in 1973, and is a leading supplier of outsourced manufacturing and filling in the non-food FMCG (Fast Moving Consumer Goods) sector. The business 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 A$165 million. Pact acquired Jalco for a total consideration of approximately A$80 million, which also equated to an EBITDA multiple of approximately 6.5x.

Meanwhile, APM is located in Keysborough, Victoria. Its manufacturing facilities utilise the latest technology to deliver tableting, encapsulation and packaging solutions. The business produces a range of therapeutic nutraceutical products including vitamin and mineral supplements, herbal remedies, amino acids and a range of other specialised formulations. It manufactures in accordance with the Australian Therapeutic Goods Administration's licensing requirements.

The acquisition will be funded by A$75 million of bank debt and a share issue of A$15 million. The acquisition will be EPS accretive in year one and will meet Pact’s target return hurdle of 20% ROI in year three.

Pact Group’s Managing Director/CEO, Malcolm Bundey, said, “The acquisition of APM is strongly aligned with our growth strategy and is expected to add significant value to Pact. APM operates in a very attractive sector which is experiencing robust growth in demand both domestically and in export markets.”


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