DS Smith Inks Pact to Sell Plastics Division for $585 Million

SEATTLE (Scrap Monster): U.K.-based DS Smith has reached an agreement with Stamford, Connecticut-based private equity firm Olympus Partners to sell its Plastics division for a sum of $585 million. DS Smith had revealed its intention to sell the Plastics division in December last year. The transaction is expected to be completed during the second half of 2019 and is subject to customary closing conditions including necessary regulatory approvals.

The transaction is likely to generate net cash proceeds of approximately $520 million, which in turn will be used to reduce the financial liabilities of DS Smith plc, in line with the strategy to bring the company’s net debt to EBITDA ratio to less than 2 times. Further, the sale is likely to result in substantial exceptional gain.

The Plastics division comprises of various plastics operations including flexible plastics, rigid plastics and foam products. It covers 26 sites across 12 different countries, employing around 2,000 staff.

Commenting on the transaction, Miles Roberts, Group Chief Executive stated that the transaction is attractive both financially and strategically for the company. He thanked all his colleagues in the Plastics division for building the business into great success. The sale transaction, coupled with the acquisition of Europac will help to reinforce DS Smith’s leadership position in sustainable packaging. Furthermore, the sale will further strengthen its robust balance sheet, Roberts added.

The purchase of DS Smith’s Plastics division further strengthens the Olympus Partners’ portfolio, which already comprises of flexible packaging specialist Liqui-Box.