Rexam to sell two healthcare units to Montagu Private Equity for $805 mn
03 February 2014
Rexam Plc, a leading global beverage can maker, today announced that it will sell the pharmaceutical devices and prescription retail packaging divisions of its healthcare business to Montagu Private Equity for £450 million ($805 million) in cash.
The London-based company plans to use the proceeds of the sale to return cash to shareholders.
Rexam, the world's largest manufacturer of beverage cans, has operations in 24 countries where it employs around 11,000 people.
Graham Chipchase, Rexam's chief executive, said after the sale, the company would be a focused beverage cans business with a strong financial position.
He 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 focused 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,'' he said
The company also said that it was in discussions for the sale of its closures and containers business, the third of its health care operations, without naming the potential buyer.
The health care devices business, based in France, designs medical devices, like inhalers and insulin pumps. The business has annual revenue of about $265 million.
The prescription retail business, based in the US, supplies pharmacies in the United States plastic vials and closures used to deliver an exact count of pills to patients. The business has annual revenue of about $165 million.
Pharmaceutical devices and prescription retail packaging accounts for 85 per cent of Rexam's total healthcare EBITDA.
Following completion of the sale, Rexam plans to return to shareholders around $805 million.
The transaction, which is expected to be completed around the middle of this year, is subject to consultation with various European works councils and conditional on regulatory approvals and subject to certain adjustments at completion.