An aggressive acquisition strategy is being blamed for the departure of Australian plastic packaging giant Pact Group Holdings Ltd.'s CEO.
Former CEO and Managing Director Malcolm Bundey resigned suddenly this month.
Chair Raphael Geminder, who owns 40 percent of Pact, was appointed executive chair to run Pact until a new CEO is appointed.
Bundey's departure closely followed the company's latest acquisition, plastic garment hanger and accessories recycling business, TIC Retail Accessories Pty. Ltd. (TICRA), a division of TIC Group Pty. Ltd., based in the Melbourne suburb of Altona North.
Pact, which had sales of A$1.67 billion (US$1.2 billion) in the fiscal year to June 30, will pay A$122 million (US$88.12) for TICRA. The sale is scheduled for completion on Oct. 1.
TICRA collects plastic garment hangers and clothing security tags from retailers after products are sold, reconditions them, and resupplies them to clothing manufacturers.
TICRA, established in 1989, operates globally and claims reuse rates of up to 80 percent. Clients includes major retail brands and department stores in Australia, New Zealand, the United Kingdom and the United States.
TICRA is the sixth major acquisition since Bundey joined Pact, but it was active in the mergers and acquisitions market before he came on board.
When Bundey joined in September 2015, Pact had just finalized its purchase of the Jalco Group, one of its customers, for A$80 million (US$57.78).
Jalco Group Pty. Ltd., headquartered in Prestons, had six plants in the Australian state of New South Wales supplying outsourced contract manufacturing and filling services to big brand owners in the fast moving consumer goods sector.
In August 2014, Pact bought Sulo MGB (Aust.) Pty. Ltd., including its subsidiary Sulo (NZ) Ltd. for A$34.8 million. Sulo was Australia and New Zealand's leading manufacturer of plastic waste and recycling bins, know in Australia as wheelie bins. It produced about 2 million two-wheel mobile garbage bins annually.
In February 2016, Bundey oversaw Pact's purchase of a key competitor, Sydney-based Power Plastics Pty. Ltd.
In July 2016, Pact bought Fruit Case Co., a New Zealand-based crate pooling business. That added to its pooling services for returnable plastic produce crates and pallets in Australia and New Zealand.
Pact has a contract with major supermarket chain Woolworths to provide plastic packaging crates that are collected, washed and re-used. Woolworths Ltd., based in the Sydney suburb of Bella Vista, operates more than 3,000 supermarkets and liquor stores across the nation.
In September 2016, Pact paid A$90 million for Australian Pharmaceutical Manufacturers Pty. Ltd., one of Australia's largest tableting, encapsulation and packaging manufacturers.
That was followed by the February 2017 A$41 million purchase of a contract manufacturer, Sydney-based Pascoe's Pty. Ltd., one of Australia's largest manufacturers of aerosol and liquid-based consumer products in the household and industrial chemicals category.
In February 2018, Pact bought two Asian packaging companies from Reynolds Group Holdings Ltd. It paid A$142 million for the operations of Closure Systems International (CSI) throughout Asia, except Japan, and Graham Packaging Guangzhou Co. Ltd. (GPG), which manufactures bottles and closures in Guangzhou.
Pact bought CSI's Nepal facility separately for US$4.8 million.
Bundey was a former Graham Packaging and CSI executive. Before he and his family relocated from York, PA., to Melbourne to join Pact, Bundey was president and CEO of Graham Packaging Co., a US$3 billion global rigid packaging company.
The Reynolds and Graham group companies are owned by Auckland, New Zealand-based rich lister Graeme Hart's private investment company Rank Group.