(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)