The following typographical amendment has been made to the ‘Sale of Filters business to Centaury Management Limited and completion of the sale of Packaging business to Mayr-Melnhof Group’ announcement released on 3 October at 07:00 under RNS 4578B.
All other details set out in the announcement are correct, and remain unchanged. The full amended text is shown below.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION. FOR IMMEDIATE RELEASE
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
ESSENTRA PLC
A leading global provider of essential components and solutions
SALE OF FILTERS BUSINESS TO CENTAURY MANAGEMENT LIMITED AND COMPLETION OF THE SALE OF PACKAGING BUSINESS TO MAYR-MELNHOF GROUP
- Sale of the Filters business to a wholly owned subsidiary of Centaury Management Limited for an enterprise value of approximately £262.1m, including 100% consolidation of certain joint ventures1 , implying a June 2022 LTM adjusted operating profit multiple of 8.2×2,3
- 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 earnout consideration
- The transaction is expected to complete no later than 31 January 2023. A Class 1 circular and notice of General Meeting will be published in due course
- The Board intends to use the net transaction proceeds to make a small contribution to its defined benefit pension schemes and prepay a portion of US private placement debt
- The sale of the Packaging business to Mayr-Melnhof completed on 1 October 2022
- The Board intends to return approximately £150m to shareholders via a special dividend after the Filters disposal has completed
- After completion of the sales of the Filters business, Essentra will be established as a pure play components business, with a healthy balance sheet, providing flexibility to pursue organic and inorganic growth opportunities
The transaction is subject to conditions which are set out further below including approval by Essentra’s shareholders. The Class 1 circular and notice of General Meeting will be published in due course. The transaction is expected to complete no later than 31 January 2023.
Commenting on today's announcement, Paul Forman, Chief Executive said:
Principal details of the transaction
The Seller has given certain warranties and indemnities to the Purchaser that are customary for a transaction of this nature and size.
The transaction is conditional upon various conditions, including the satisfaction (or waiver, where applicable) of the following:
- Approval of a resolution approving the transaction by shareholders at a General Meeting ofEssentra
- The completion (in all material respects) of a group reorganisation to achieve the separation ofFilters from the remainder of the Essentra group
- There not being in force any applicable law that prohibits or renders illegal the sale or purchase ofshares
The Board expects that, subject to the satisfaction and/or waiver (where applicable) of the conditions to the transaction, completion will occur no later than 31 January 2023.
Class 1 transaction
Peel Hunt LLP is acting as sole sponsor to Essentra in regard to the sale of the Filters business. Goldman Sachs International is acting as exclusive financial advisor to Essentra in regard to the sale of the Filters business. Lazard & Co., Limited is acting as independent financial adviser to the Board of Essentra.
Completion of the sale of Packaging to Mayr-Melnhof Group
Further to the announcement on 24 June 2022, Essentra is pleased to confirm, following receipt of regulatory approvals and shareholder approval, the successful completion of the disposal of ESNT Packaging & Securing Solutions Limited and Essentra Packaging US Inc and their respective subsidiary companies (“Packaging”) to Mayr-Melnhof Group (“MM”) for £312 million on a cash free, debt free basis and subject to customary adjustments. The transaction completed on 1 October 2022.
Market Abuse Regulation statement
This announcement contains inside information
The person responsible for arranging the release of this announcement on behalf of the Company is Jon
Green, Company Secretary of Essentra.
Investor enquiries:
Essentra plc
Jack Clarke, Chief Financial Officer
Claire Goodman, Group Investor Relations Manager
Tel: +44 (0)1908 359100
Media enquiries:
Tulchan Communications LLP
Olivia Peters
Lisa Jarrett-Kerr
Tel: +44 (0)20 7353 4200
Notes
- The enterprise value of up to £262.1m is based on 100% consolidation of certain joint venture entities (China Tobacco
Essentra (Xiamen) Filters Co., Ltd and ITC Essentra Limited) (the “JVs”), which are accounted for as subsidiaries of
Essentra in its consolidated financial statements due to a control achieved via board membership. Of this £262.1m
enterprise value, £42.1m relates to the Filters’ business non-controlling interests in the JVs - The term adjusted excludes the impact of amortisation of acquired intangible assets and adjusting items
- Multiple of 8.2x based on an enterprise value of £262.1m and June 2022 LTM adjusted operating profit of £31.8m.
Based on 100% share of the JV and includes earn-out consideration of up to £20m - Up to £20m deferred earn-out consideration (up to £10m achievable for each of 2023 and 2024, respectively)
- 2021 USPP repayments are on a pro rata basis at par and without make-whole premium
- The value of gross assets excludes intercompany receivables and cash which will be settled as part of the transaction
Cautionary forward-looking statement
No offer or solicitation
This announcement does not constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for, any security.
No profit forecasts or estimates
No statement in this announcement is intended as a profit forecast or estimate for any period.
Important information relating to financial advisers for the Filters transaction
Lazard & Co., Limited (“Lazard”), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser to the Board of Essentra plc and no one else in connection with the transaction and will not be responsible to anyone other than the Board of Essentra plc for providing the protections afforded to clients of Lazard, nor for providing advice to any other person in relation to the transaction or any other matters referred to in this announcement. Neither Lazard nor any of its affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Lazard in connection with this announcement, any statement contained herein or otherwise.