IVE Group Limited (ASX:IGL) entered into binding agreement to acquire JacPak Pty Ltd for AUD 35 million on October 25, 2023. The total purchase consideration for JacPak is AUD 35 million, AUD 27.9 million payable on completion, AUD 4 million payable as deferred consideration subject to the achievement of performance hurdles over a 12 month period, and the assumption of AUD 3.1 million of equipment finance leases. The deal value represents a multiple of 5.8 x FY23 EBITDA.

The purchase consideration payable at completion will be funded via the IVE's recently established acquisition facility. JacPak reported revenue of AUD 45 million for FY23. JacPak will continue to operate as a standalone business from an operational perspective, with the combined teams working closely.

Ashley Tomlin, current owner of JacPak, will remain with the business post completion. The agreement is subject to the satisfaction of customary conditions and is scheduled to complete on October 31, 2023. Following the realization of synergies, the business is expected to deliver EBITDA of around AUD 8.4 million and NPAT of around AUD 3 million, giving rise to EPS accretion of approximately 7% (relative to the mid-point of the IVE's FY24 NPAT guidance).

Post the realization of synergies, this represents a 4.2 x multiple on the purchase consideration of AUD 35 million.