DS Smith has agreed the sale of its plastics division to private equity firm Olympus Partners for $585m (£445m). The plastics division comprises the plastics operations of DS Smith, including flexible plastics, rigid plastics and foam products.
Gross assets of the business last year £223m and profit before tax for the 12 month period to 31 October 2018 was £28m. The deal is expected to be completed in the second half of this year, and DS Smith expects net cash proceeds after taxation, transaction adjustments and expenses of approximately £400m.
The sale confirms DS Smith’s strategy of deleveraging and focusing on its paper and corrugated business – an area it clearly sees as the future for sustainable packaging.
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 theplastics division have worked hard to build the business into the success that it is today, and that quality has been recognised by Olympus Partners.”