Essentra plc (LON: ESNT) has today announced it has signed an agreement to divest its Speciality Tapes business (Duraco Specialty Tapes LLC) to certain wholly-owned subsidiaries of OpenGate Capital. The Transaction values Speciality Tapes at US$77m (approximately £61m), free of cash and debt.
The consideration, which is subject to the usual adjustments for net debt and working capital at closing, will be payable on completion of the transaction and will be satisfied fully in cash. Completion is subject to customary closing conditions and the Board intends to use the proceeds to further strengthen Essentra’s balance sheet.
For the year ended 31 December 2018, the pro forma operating profit of the Speciality Tapes business was £7.8m; of this, c. £4.9m was reported under the Specialist Components division and c. £2.9m relating to the Speciality Tapes Express distribution locations in the US was reported under the Components division. As at 31 December 2018, the gross assets of Speciality Tapes were £54.6m.
With effect from 1 January 2019, the results of the Speciality Tapes Express distribution locations have been included within the Specialist Components division.
Commenting on today’s announcement, Paul Forman, Essentra plc Chief Executive said:
“The sale of Speciality Tapes represents another significant move in the simplification of our portfolio. With OpenGate having the investment resource to build on the unique capabilities of Speciality Tapes and to further diversify its end-market exposure, the transaction both represents good value for Essentra’s shareholders and provides the business with a strong platform for future successful growth.”