Recycling firm DS Smith has announced that it is selling its plastics division to Olympus Partners for an enterprise value of $585 million (£450 million).
This transaction is subject to customary closing conditions including regulatory approvals, with completion expected to take place in the second half of this year.
DS Smith has said it expects net cash proceeds after taxation, transaction, adjustments and expenses of £400 million.
The plastics division comprises the plastics operations of DS Smith, including flexible plastics, rigid plastics and foam products.
This sale represents an important step in DS Smith’s continued progress a “leader” in sustainable packaging, and drives the programme of deleveraging, alongside organic cashflow.
DS Smith group chief executive Miles Roberts said: “I am delighted to confirm that we have reached an agreement for the sale of our Plastics division. The transaction is attractive both financially and strategically for DS Smith as, together with the acquisition of Europac, we reinforce our position as a leader in sustainable packaging with a clear focus on our fibre-based business. My colleagues in the Plastics division have worked hard to build the business into the success that it is today, and that quality has been recognised by Olympus Partners.
“We are pleased with the performance of the business during the second half of the year. While macroeconomic conditions remain uncertain, we are confident of continued strong demand for our innovative and high quality sustainable packaging and the resilience of our FMCG-focussed customer base. At the same time, the sale announced today will further strengthen our robust balance sheet and the Board continues to view the prospects for the business with confidence.”