Tredegar Corp. (TG), a manufacturer of plastic films and aluminum extrusions, announced Tuesday that it has agreed to sell its personal care films business to affiliates of Brazil’s Fitesa S.A.
Cash proceeds from the sale net of transaction costs, purchase price adjustments and transition services are estimated at $40 to $45 million.
Closing of the transaction, which is contingent upon the satisfaction of customary conditions, would occur during the fourth quarter of 2020.
Personal Care Films business, within the personal care component of Tredegar’s PE Films segment, has approximately 400 employees worldwide. It has manufacturing sites located in Indiana; The Netherlands; Hungary; Brazil; and India.
Meanwhile, the proposed sale excludes the packaging film lines and operations relating to the Pottsville, Pennsylvania manufacturing site.
For the 12 months ended June 30, net sales and EBITDA from ongoing operations for the Pottsville Packaging business to be retained by Tredegar
were $23 million and positive $7.0 million, respectively.
Tredegar also estimates that approximately $3 million of certain PE Films segment annual shared services costs previously allocated to Personal Care Films will not be eliminated in the transaction.
The Personal Care Films business, with a carrying value of net assets of approximately $70 million, is expected to be reported as a discontinued operation beginning in the third quarter. The company is expected to report a non-cash accounting loss at that time.
Tredegar’s surface protection component of its PE Films segment, with manufacturing at the Pottsville facility as well as in Guangzhou, China, will add Pottsville Packaging to its responsibilities.
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