DS Smith confirms that it has reached agreement to sell its Plastics division to Olympus Partners for an enterprise value of $585 million (approximately £450 million). This represents a multiple of 9.9x EBITDA based on the past 12 months to 31 October 2018.
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. They expect net cash proceeds after taxation, transaction adjustments and expenses of approximately £400 million.
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 £223 million and profit before tax for the 12 month period to 31 October 2018 was £28 million.
Miles Roberts, Group Chief Executive, said, “I am delighted to confirm that we have reached an agreement for the sale of our Plastics division. The transaction is attractive both financially and strategically for DS Smith as, together with the acquisition of Europac, we reinforce our position as a leader in sustainable packaging with a clear focus on our fibre-based business. My colleagues in the Plastics division have worked hard to build the business into the success that it is today, and that quality has been recognised by Olympus Partners.”
