Essentra will use the proceeds from the transaction to improve its balance sheet and make a small contribution to its defined benefit pension schemes
Plastic and fibre products supplier Essentra announced the sale of ESNT Packaging & Securing Solutions and Essentra Packaging US and their subsidiaries to Mayr-Melnhof Group for £312m.
Mayr-Melnhof Group is an Austria-based producer of carton board and folding cartons.
Essentra will use the proceeds from the transaction to improve its balance sheet and make a small contribution to its defined benefit pension schemes.
The transaction is expected to be completed in the fourth quarter of 2022, subjected to customary adjustments.
Essentra will reorganise the group prior to the closing of the deal to achieve the separation of packaging from the rest of the group.
The firm will transfer some assets that are now a part of Packaging to the retained Essentra group and transfer other assets which are presently part of the Essentra group to Packaging.
In November last year, Essentra commenced a strategic review of its Packaging business to become a pure-play industrial components business.
Essentra chief executive officer Paul Forman said: “The sale of Packaging marks a significant step on our journey to become a pure-play Components business.
“A substantial amount of work has gone into improving the Packaging division over the last few years and I would like to thank all colleagues for their commitment and hard work whilst part of Essentra.
“I wish them all the best for the future. I am sure that the business will continue to make excellent progress under the ownership of Mayr-Melnhof.”
Forman added: “Essentra has a bright future as a global leading manufacturer and distributor of components with a clear strategy and significant opportunities to accelerate growth and expand market share.
“This transaction will enhance Essentra’s balance sheet strength and enable the Group to participate in further investment activity.”
The transaction does not include Essentra Packaging’s business in India.
Last month, the company announced an investment in a new Landa S10 Nanographic Printing Press at its Bradford site in the UK.