What did Close the Loop (ASX:CLG) announce regarding its subsidiary ISP Tek Services?

Close the Loop has agreed to sell its Dallas-based subsidiary, ISP Tek Services LLC, to Ivy Technology Holdings, LLC for a total consideration of US$10 million. The payment structure includes US$9 million cash at settlement and a US$1 million seller note.

Why is Close the Loop (ASX:CLG) selling ISP Tek Services?

Management identified ISP Tek Services as a non-core business segment that could not be optimally operated or managed within the company's existing corporate structure.

How will Close the Loop (ASX:CLG) use the proceeds from the US$10 million sale?

The company will combine the US$10 million transaction proceeds with its existing cash reserves to retire approximately US$16 million in outstanding debt.

What is the FY27 earnings guidance for Close the Loop (ASX:CLG) following the sale?

Close the Loop has issued an EBITDA guidance range of US$14 million to US$16 million for FY27. This guidance reflects management's financial expectations for the streamlined business model, which will focus entirely on its core circular economy divisions following the exit from ISP Tek Services.

What balance sheet changes are occurring at Close the Loop (ASX:CLG) alongside the debt reduction?

In addition to retiring US$16 million in debt, Close the Loop confirmed that the settlement of its convertible notes is now complete. Furthermore, the company is currently progressing with bank debt refinance activities to optimize its capital structure and secure more favourable financing terms.

Is the ISP Tek Services divestment good or bad for Close the Loop (ASX:CLG) shareholders?

The transaction is a trade-off that leans structurally positive. While the company is divesting an asset and acknowledging past operational inefficiencies in that segment, it eliminates US$16 million in debt and cuts interest expenses.

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Close the Loop sells ISP to pay debt

Written by Isaac FrancisPublished May 20, 2026, 10:15 PM

Close the Loop (ASX:CLG) announced the sale of its Dallas-based subsidiary, ISP Tek Services, to Ivy Technology for a total consideration of US$10 million.

The transaction structure comprises US$9 million payable at settlement for the company’s shares, alongside a US$1 million seller note to be disbursed in four equal quarterly instalments, commencing immediately upon settlement.

The divestment marks a critical milestone in Close the Loop’s ongoing strategic transformation.

Proceeds from the sale, combined with existing cash reserves, will be deployed to retire approximately US$16 million of outstanding debt, strengthening the company’s balance sheet and reducing ongoing financing costs.

Management acknowledged that while certain non-core business segments could not be optimally operated within the previous framework, the realignment allows the group to sharpen its operational focus on its high-performing packaging and resource recovery divisions, where it maintains a distinct competitive advantage.

The company confirmed that the settlement of its convertible notes is complete and bank debt refinance activities are currently in progress.

Close the Loop has issued an EBITDA guidance range of US$14 million to US$16 million for FY27.

Chairman Grant Carman expressed high confidence in the corporate restructure, stating that the newly simplified platform positions the company to drive sustainable growth, improve profitability, and deliver long-term value to shareholders across its core markets.