The acquisition price represents a multiple of 6.5 times historical EBITDA. Completion is expected to occur on September 16, subject to customary conditions.
APM is one of the largest providers of manufacturing and packaging services for nutraceuticals in Australia.
Established in Melbourne in 2002, it delivers 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, in accordance with the Australian Therapeutic Goods Administration's licensing requirements.
Return on investment
The acquisition will be funded by $75 million of bank debt and a share issue of $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, the firm said in a statement to investors.
Pact Group’s managing director and chief executive officer, 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.”
“The team at APM share Pact’s passion for innovation and our vision for providing the best manufacturing and packaging solutions for our customers. They are very experienced and have established their products as the benchmark in the Australian market, with an enviable reputation as a supplier of quality.”