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(Alliance News) - Essentra PLC on Friday said it has sold its packaging business to Mayr-Melnhof Group, marking a "significant" step to becoming a pure-play components business.
The Milton Keynes, England-based plastic and fibre products maker sold ESNT Packaging & Securing Solutions Ltd and Essentra Packaging US Inc, along with its subsidiaries.
The FTSE 250 company said the sale price of GBP312 million implies a 12.4 multiple on earnings before income, tax, depreciation and amortisation of GBP25.2 million, which includes stand-alone costs of GBP6.1 million.
The board said it intends to use the cash to strengthen its balance sheet, and make a small contribution to the company's defined-benefit pension schemes.
Last year, Essentra had set out its strategic ambition to become solely a components business, with its Filters and Packaging divisions likely to be sold off.
Chief Executive Paul Forman said: "The sale of packaging marks a significant step on our journey to become a pure-play components business.
"Essentra has a bright future as a global leading manufacturer and distributor of components with a clear strategy and significant opportunities to accelerate growth and expand market share," Forman added.
The transaction, which is expected to close in quarter four of 2022, is subject to the fulfilment of customary closing conditions.
Shares in Essentra were up 0.7% to 274.50 pence each in London on Friday morning.
By Sophie Rose; sophierose@alliancenews.com
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