Australia’s IVE Group has announced signing a binding agreement to acquire 100% of packaging company JacPak for a total purchase consideration of A$35m ($22m).

Out of the total purchase consideration, IVE is required to pay approximately A$27.9m on the completion of the deal.

Roughly A$4m of the sum will be paid as a deferred consideration, which depends on the achievement of performance hurdles over the next 12-month period while the remaining A$3.1m will be assumed in the form of equipment finance leases.

IVE said it will fund this purchase consideration via its recently established acquisition facility.

The completion of this transaction is now subject to the fulfilment of certain customary conditions and is expected to be completed by 31 October 2023.

Upon completion of the deal, JacPak will continue to operate as a standalone entity, with combined IVE-JacPak teams working in close coordination to boost revenue.

JacPak’s current owner Ashley Tomlin will continue to remain with his business.

IVE CEO Matt Aitken said: “Over the last two years we have communicated our strategic intention to enter the short-to-medium-run folding cartons segment of the Australian packaging sector.

“We are pleased to be acquiring a solid entry point into the sector through the cornerstone acquisition of a business of the calibre of JacPak - a market-leading, profitable and very well-respected business.”

JacPak offers its solutions for various industries such as fast-moving consumer goods, dairy, cosmetics, and pharmaceuticals.

Through this strategic acquisition, IVE intends to enter the domestic fibre-based packaging market.

The folding cartons market is one of the core components of the preferred packaging formats across different sectors such as food and beverage, IVE noted.

The marketing company said that this sector is complementary to its own current product and service offerings and will contribute to the company’s long-term strategy to diversify its business operations.