The sale of Essentra’s packaging and filters units will reposition the company as a pure-play components business. Photo credit: Essentra Plc.
Essentra PLC announced the sale of its filter business, the completion of the sale of its packaging business to Mayr-Melnhof Group, and the appointment of a new c.e.o.
Last year Essentra announced that it would review its packaging and filters businesses in order to reposition itself as a pure-play components business. The assessment found that selling both units would be in shareholders' best interest.
Essentra Filter Holdings Limited was sold to Frank Acquisition Four Limited, a wholly-owned subsidiary of Centaury Management Limited. The consideration is comprised of approximately £200m initial consideration due on completion on a cash-free, debt-free basis and subject to customary adjustments, and up to £20m deferred earn-out consideration following completion.
The transaction values the filters business at an enterprise value of approximately £262.1m, including 100% consolidation of certain joint ventures. The transaction is expected to complete no later than January 31, 2023.
After the sale of the filters business has completed, Essentra’s board intends to return approximately £150m of the residual net transaction proceeds from the disposals of packaging and filters to shareholders via a special dividend.
The transaction will further strengthen the group's balance sheet and, after accounting for the repayment of Essentra’s US private placement (USPP) debt and special dividend, will provide Essentra Components with the flexibility to pursue value creating organic and inorganic opportunities, including future bolt-on acquisitions.
Essentra also completed the sale of its packaging business in a deal worth £312 million on October 1.
In addition, Essentra announced current c.e.o Paul Forman will step down at the end of the current financial year on December 31, 2022. He will be succeeded by Scott Fawcett who is currently the managing director of Essentra's Components division. Scott will join the board on January 1, 2023.
Forman oversaw Essentra’s successful transformation. He joined the group in 2017 and embarked on a "stability, strategy, growth" journey refocusing the group on its core divisions and restoring them tolong-term revenue and profit growth. This strategy led to the creation of three leading standalone global businesses with exciting growth prospects in their respective markets.
Fawcett was appointed managing director of the components division in 2017. He joined Essentra Components in 2010 as managing director of the European business and subsequently joined the Group Management Committee in 2014, leading the components global strategy. Over the last 12 years, he led the transformation of the components business from a product-led to service-led business, enhancing Essentra's customer proposition and delivering a decade of growth supported by the acquisition of nine businesses.