Under the collective banner New Diversey, the division has been acauired by Bain Capital Private Equity for approximately $3.2bn (£2.57bn).
The sale will allow Sealed Air to focus more sharply on its provision of food, product and medical packaging solutions. Upon closing of the transaction, Sealed Air expects to use the proceeds to repay debt and maintain its net leverage ratio in the range of 3.5 to 4.0 times, repurchase shares to minimise earnings dilution, and fund core growth initiatives, including potential complementary acquisitions to its Food Care and Product Care divisions.
New Diversey integrates chemicals, floor care machines, tools and equipment, with a wide range of technology based value-added services, food safety services and water and energy management. It will continue to employ approximately 8,600 people globally. Diversey Care and the related food hygiene businesses combined generated net sales of approximately $2.6bn (£2.09bn) in 2016.
The deal includes a formal offer to acquire certain of Diversey’s business in France and the Netherlands, which may be accepted following Works Council consultation. The results of operations of New Diversey will be reported as discontinued operations beginning in the first quarter of 2017. Sealed Air is tentatively scheduled to report its first quarter 2017 results on 9 May, 2017.
Speaking about the likely strategy behind the acquisition, Nicholas Mockett, head of packaging M&A, Moorgate Capital, told Packaging News:“Sealed Air is a global market leader in food and healthcare flexible packaging markets. It is one of the few packaging companies with brands which are recognised by consumers, particularly Cryovac and Jiffy. There was a rationale behind the $4.3bn acquisition of Diversey in June 2011 but the markets did not like the deal and pushed Sealed Air’s share price down as a consequence. Selling the business on to Bain Capital for $3.2bn is drawing a line under that chapter.”