Prime Highlights
- Gerresheimer to sell Centor and Primary Packaging Plastics units to Apax Funds for €1.5 billion.
- The sale follows accounting investigations that led to regulatory audits and an index removal.
Key Facts
- Gerresheimer is a German drug packaging manufacturer.
- The two units generate around €570 million in annual revenue and employ about 2,400 people.
Background
German drug packaging firm Gerresheimer has agreed to sell two plastic packaging units, including its U.S. business Centor, to private equity group Apax Funds for €1.5 billion, or $1.71 billion, including debt.
The sale comes after internal investigations into the company’s accounting practices, which delayed its financial results and led to its removal from a small-cap stock index earlier this year. Germany’s financial regulator also opened audits into the company’s financial statements.
The two units being sold generated combined revenue of around €570 million last year and employ close to 2,400 people, the company said. Gerresheimer began the Centor sale process in February as part of efforts to strengthen its capital structure. The deal also includes the global Primary Packaging Plastics unit.
The company stated that it would use the expected cash inflows to significantly improve its capital and financing structure by meaningfully reducing debt.
As part of the deal, Apax will take over Gerresheimer’s 15 production sites for primary plastic packaging in nine countries, that include production facility of Centor in the United States.
Gerresheimer rejected a buyout offer from American competitor Silgan earlier this year, preferring to concentrate on fixing its accounting problems and finalizing the Centor transaction.
The company said last month that its internal accounting review had been completed, though the assessment of possible damages claims remained ongoing.
The sale of Centor is expected to close by the end of the current financial year, while the sale of the Primary Packaging Plastics business is expected to conclude in the first half of next year.
