A private equity firm, an affiliate of Sun Capital Partner has made a binding offer for the CTH part of the business for a total of $459m (€367) subject to consultation with various European works councils.
The transaction is subject to certain adjustments and regulatory approvals on completion and is expected to be completed in Q4 2012.
State of play
In total, Rexam’s personal care business employs some 7,000 people in Europe, the US and Asia. In 2011, the business had sales of $773m (€625) and an underlying operating profit of $58m (€47) before central overheads like CTH which came in at $39m (€32).
As of 31 December 2011, it had gross assets of $101m (€809) with CTH accounting for $940m (€760).
The company expects that there will be an impairment charge of some $308m (€249) at the half year arising from the sale of CTH, which will be broadly offset in the second half by a gain on the sale of its High Barrier Food packaging business, associated foreign exchange gains and tax credits.
As a result of the sale, Rexam says it will carry out a restructuring programme to remove residual overheads which, together with certain separation costs, will give rise to an exceptional charge of some $60m (€49) in 2012, of which $38m (€31) will be cash costs.
Following completion, Rexam plans to return around $569m (€460) (at current exchange rates) to shareholders which, it is anticipated, will be effected by way of a redeemable B share scheme together with a share consolidation.