Close the Loop sells ISP Tek Services for $10M to slash debt

What's the deal? Australian-listed Close the LoopDealroom has a profile for this one. Try Dealroom → (ASX:CLG) is selling its Dallas-based subsidiary, ISP Tek ServicesDealroom has a profile for this one. Try Dealroom →, to Ivy TechnologyDealroom has a profile for this one. Try Dealroom → for US$10M. The deal includes US$9M at settlement and a US$1M seller note paid in four quarterly instalments.

Proceeds from the sale, combined with existing cash reserves, will retire roughly US$16M in outstanding debt.

Why now? The divestment is part of a broader strategic restructure. Close the Loop has completed the settlement of its convertible notes and is currently refinancing its bank debt.

Management said non-core segments like ISP Tek Services could not be optimally run within the company's previous structure. The sale lets it focus on its packaging and resource recovery divisions, where it sees a stronger competitive edge.

What could go wrong? The company is banking on its remaining operations to drive growth without the revenue ISP Tek Services contributed. If the packaging and resource recovery units underperform, the slimmed-down business could struggle to hit its FY27 EBITDA guidance of US$14M to US$16M.

The US$1M seller note also introduces counterparty risk — Ivy Technology must follow through on four quarterly payments post-settlement.

The signal: The buyer profile adds context here: Ivy Technology is a late-growth electronics repair and service provider, suggesting ISP Tek Services — itself an early-growth asset — lands with a more natural strategic owner. For Close the Loop, classified as a breakout-stage sustainability solutions company on Dealroom, shedding a non-core tech services unit to concentrate on packaging and resource recovery aligns the portfolio more tightly with the corporate responsibility market it was built around.

Read more: grafa.com