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Packager DS Smith to sell plastics business for £400 million

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(Reuters) – Packaging company DS Smith Plc said on Wednesday it plans to sell its plastics division to private equity firm Olympus Partners for an enterprise value of $585 million.

DS Smith expects net cash proceeds after taxation, transaction adjustments and expenses of about 400 million pounds.

“The sale is expected to result in a substantial exceptional gain and be marginally EPS dilutive,” the company said.

DS Smith said in December it was exploring options for its plastics division including a potential sale. The business, contributing 6 percent of overall revenue, was hit by higher polymer prices and a lag in price recovery.

The plastics business of DS Smith includes flexible plastics, rigid plastics and foam products and reported a profit before tax of 28 million pounds for the 12 month period ended Oct. 31.

(Reporting by Sangameswaran S in Bengaluru; Editing by Shounak Dasgupta)

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