Rexam has announced the proposed sale of its Personal Care packaging business for $709m. The sale will be made in two parts including the Cosmetics, Toiletries and Household care products business (CTH) to an affiliate of Sun Capital Partners for $459m and the High Barrier Food packaging business (HBF) to a subsidiary of Silgan Holdings for $250m.
Both the transactions, which are subject to certain adjustments at completion and conditional on certain regulatory approvals, are expected to complete in Q3 2012 for HBF and Q4 2012 for CTH.
Rexam’s Personal Care business reported sales of £502m in 2011 and underlying operating profit of £38m before central overheads (CTH: £26m and HBF: £12m).
According to the global consumer packaging company, the sale of CTH will result in an impairment charge of some £200m at the half year for the company, which will be broadly offset in the second half by a gain on the sale of HBF.
Rexam will carry out a restructuring program to remove residual overheads which will give rise to an exceptional charge of some £40m in 2012 together with certain separation costs, out of which £25m will be cash costs, as a result of the sale.