Rexam plc, a leading global consumer packaging group and a leading global beverage can maker, has announced the proposed sale of the pharmaceutical devices and prescription retail packaging divisions of its healthcare business for $805 million in cash.
The healthcare business has three divisions: Pharmaceutical devices, prescription retail packaging and closures & containers. Rexam is in discussions regarding the sale of closures & containers and will provide an update in due course.
Montagu Private Equity has made a binding offer for the pharmaceutical devices and prescription retail packaging divisions for a total of $805 million in cash. The transaction is subject to consultation with various European works councils and is conditional on the necessary regulatory approvals and subject to certain adjustments at completion. The transaction is expected to complete around the middle of this year.
In 2012, pharmaceutical devices and prescription retail packaging employed some 1,500 people and had sales of £250 million and underlying operating profit of £43 million before central overheads. As at December 31, 2012, it had gross assets of £538 million. Pharmaceutical devices and prescription retail packaging accounts for 85 per cent of total healthcare EBITDA.
Following completion of the sale of pharmaceutical devices and prescription retail packaging, Rexam plans to return to shareholders around £450 million, which, it is anticipated, will be effected by way of a redeemable B share scheme together with a share consolidation.
Graham Chipchase, Rexam's chief executive said: "The sale of the healthcare business is part of our long-term strategy to maximise shareholder value. The pharmaceutical devices and prescription retail packaging divisions represent the majority of the value of our healthcare business. Following the sale of healthcare, we will be a focussed beverage cans business with a strong financial position. Our strategy is to balance growth and returns and we will continue to pursue selective investment opportunities in beverage cans in higher growth markets.”