There’s another entrant to the IPO circuit and this one has a sustainability edge.Manufacturing, recycling and urban mining company Close the Loop Group is in front of investors again this week, having previously considered a listing in 2018.Close the Loop Group is able to break down batteries and re-purpose them. The business is substantially larger this time around, thanks largely to Close the Loop merging with packaging company O F Packaging as part of the listing.An investor presentation seen by Street Talk revealed the combined business generated $72.2 million revenue in the 2021 financial year, of which O F Packaging was responsible for $41.6 million.Close the Loop started out in the early 2000s as a recycler of printer cartridges and toner and has expanded into product design and manufacturing, thanks to O F Pack. It envisages its future growth coming from urban mining; breaking down things like batteries, electronic waste, power tools and cosmetics, and repurposing them. Aitken Murray Capital Partners and Cumulus Wealth are leading the IPO.It’s understood the company, which is due to lodge its prospectus on October 20, is raising up to $12 million and will list in late November with a $66 million-odd market capitalisation.The company operates about 200,000 collection centres in the US (where people can drop off their goods for recycling or repurposing) and 60,000 in Australia where people and businesses can deposit print cartridges and other urban waste.After collecting the products, it break them down the products and extract the materials that can be re-used, selling it back to feedstock suppliers and industry.Funds from the float will partly go toward new processing facilities, automation of processes and upgraded machinery, as well as acquisitions.The company is EBITDA-positive, with earnings before interest, tax, depreciation and amortisation of $13.2 million in 2021 and $6.9 million cash. For 2022 it is forecasting $79.2 million in revenue and $14.4 million in EBITDA.Advertisement While it has few comparable companies in the local market, US battery repurposing company Redwood Materials (founded by former Tesla CTO JB Straubel in 2017) was valued at $US3.7 billion in July.In a seven-point pitch to investors, bankers emphasised the company’s connection to the growing sustainability push, and its role in the circular economy.The business also has regulatory tailwinds, with more focus on climate action and emissions reductions from governments globally and the OECD.The company is led by O F Packaging co-founder Joe Foster and its board is led by chairman Greg Toll, the former CEO of Sunrise Energy Metals.Collectively the board and management team own 44 per cent of the business.
