DS Smith has reached agreement to sell the Plastics division to Olympus Partners for an enterprise value of $585 million, (approximately GBP 450 million). The transaction is subject to customary closing conditions including regulatory approvals, with completion expected to take place in the second half of this calendar year, as the company said in the press release received by Lesprom Network.
The Plastics division comprises the plastics operations of DS Smith, including flexible plastics, rigid plastics and foam products. Gross assets of the business as at 31 October 2018 were GBP 223 million and profit before tax for the 12 month period to 31 October 2018 was GBP 28 million.
This sale represents an important step in DS Smith's continued progress as a leader in sustainable packaging and accelerates the programme of deleveraging, alongside organic cashflow. The cash proceeds are expected to be used to reduce the financial gearing of DS Smith plc, in line with its medium-term target of net debt / EBITDA at or below 2.0x. The sale is expected to result in a substantial exceptional gain and be marginally EPS dilutive.
DS Smith is a leading provider of corrugated packaging in Europe.
